The Effect of the Russian-Ukrainian War on the Global Economy

A blog post by Arianna Cruickshank, Junior Associate

Russia’s invasion of Ukraine, which began in February 2022, triggered the start of the biggest refugee crisis and largest military mobilization the world has seen since World War II[1].  As of August 2022, 13 million Ukrainians have been displaced and 9,000 Ukrainian military soldiers and 5,600 civilians have been killed[2]. Russia’s expansion now occupies 20% of the country, which is comparable to “the size of New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New Jersey, Delaware, and much of Maryland combined”[3]. The World Bank has also estimated that the Ukrainian economy will shrink by 45% because of the war[4].

In the international community, Russia benefits from its special status as one of the five permanent members to the United Nations Security Council (“Security Council”) under Article 27 of the U.N. Charter, which grants permanent members veto power to prevent the adoption of a proposed Security Council resolution[5]. Accordingly, Russia vetoed the Security Council’s first attempt to condemn Russia’s military aggression against Ukraine[6]. G7 members such as the United States and the European Union then responded by revoking Russia’s “most favored nation” status which previously granted Russia numerous trade advantages such as equal access to WTO member markets and guaranteed equal tariffs[7]. Through these measures, countries opened the door for sanctions and embargos against Russia.

While international intervention and humanitarian support are critical, it is unlikely that sanctions will deter Russia’s behavior, since the Chinese market promises an accessible and lucrative alternative for Russian goods and services. Additionally, sanctions against Russia will have a pervasive effect on the global economy. For example, economists recently predicted that sanctions against Russia will contribute to global supply chain disruptions and an estimated 40% decline in global economic growth[8]. While Americans should be prepared for higher energy costs and increased inflation[9], a greater effect of Russia’s isolation will be felt across the European Union, because of its distinguished dependence on Russian energy and natural gases[10].

Nonetheless, Americans are prepared to support Ukraine[11] and the international community should hold Russia accountable for its war crimes.


[1] Dan Bilefsky et al., The Roots of the Ukraine War: How the Crisis Developed, The NY Times (Oct. 12, 2022),

[2] Julian Hayda et al., 6 key numbers that reveal the staggering impact of Russia’s war in Ukraine, National Press Radio (Aug. 24, 2022),

[3] Id.

[4] Id.

[5] U.N. Charter, art. 27.

[6] Edith M. Lederer & Jennifer Peltz, WATCH: Russia vetoes U.N. resolution demanding end to Ukraine attack, PBS News Hour, (last visited Dec. 6, 2022).

[7] Anneken Tappe, Here’s what the ‘most favored nation’ status. Means – and why Russia still has it, CNN Business, (last visited Dec. 6, 2022).

[8] Cong. Rsch. Service, Russia’s war on Ukraine: The Economic Impact of Sanctions (May 3, 2022).

[9] Shibley Telhami, Americans’ preparedness to pay a price for supporting Ukraine remains robust, Brookings (July 5, 2022),

[10] Russia’s war on Ukraine: The Economic Impact of Sanctions, supra note 8.

[11] Brookings, supra note 9.

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