IIF Authors

Status: Will be live at 03/10/2022 07:30

Global Macro Views: Russia’s Invasion of Ukraine and EM

  • Sanctions have drastically tightened Russia’s financial conditions.
  • We forecast a very deep recession of -15 percent GDP growth in 2022, …
  • twice as severe as the 2009 recession and subject to material downside risk.
  • Prospects for contagion to the rest of EM depend on the path of war in Ukraine.
  • Severe escalation of the conflict will cause EM capital flows to pull back broadly, …
  • while a more contained conflict – our baseline – sees divergent fortunes in EM.
  • Rising commodity prices help EM commodity exporters, especially in LatAm.
  • But Eastern and Western Europe will be hit hard via weaker trade, …
  • and big emerging market importers of oil and wheat are at risk.