In our March update, we reassess our economic and market forecasts to reflect the impact of the war in Ukraine and look at how central banks are likely to respond to the prospect of weaker growth and surging inflation in Europe.
It's unthinkable that I would ever experience war on my doorstep - Carsten Brzeski
The sanctions are unlikely to stop the war as long as Russia can continue selling oil and gas to Europe and other countries. And the revenues from the extraordinarily high energy prices actually partly offset the negative effects of the sanctions. We'll look at those direct effects. And we'll consider the indirect consequences on countries and markets around the world as governments and central banks continue to fight inflationary and many other pressures.
A closer look at the sanctions
So far, the sanction response to the military escalation has been aggressive and generally coordinated, but careful not to disrupt Russia’s key commodity exports to the main partners. That is probably explained by Russia’s importance to the commodity and financial markets and also by the necessity to leave room for additional pressure should things get still worse. The measures announced in the headlines are bold, including full blocking sanctions against banks, a cut-off from the SWIFT messaging system which allows financial institutions to authorise payments, the sanctioning of private assets of individual Russians (the Specially Designated Nationals list), export bans on high tech goods and sanctions on the Central Bank of Russia. These are all elements from the most severe Iranian playbook.