Economic Impact of the Invasion in Ukraine

Diplomatic and military tensions between Russia and Ukraine that had been escalating for months, even years since the Russian annexation of Crimea in 2014, have now become a full-blown armed conflict. The situation has particularly escalated this week after Russia officially recognized the sovereignty of pro-Russian separatists in eastern Ukraine in the regions of Lugansk and Donetsk. Moving quickly from words to deeds, Russian President Vladimir Putin launched a major military offensive early Thursday morning in several regions of Ukraine, not just those at the origin of the conflict. Ukraine’s European and American allies have already reacted this week with the imposition of diplomatic, financial and economic sanctions. However, in the wake of the Russian invasion, more severe sanctions appear likely, and there is a possibility of even more direct military support to Ukraine.