Three other disruptions have eased, as connections in our global system, together with cooling of demand, buffered their effects.
However, we find five disruptions with clear effects that may endure: the humanitarian crisis, energy source diversification, defense spending increases, cyber as a stage for conflict, and corporations’ pull-back from Russia. As recent events in Ukraine highlight, the ultimate outcome remains profoundly uncertain.
In this update, we look at what’s happened in the 16 months since the invasion. As we highlighted, others were less predictable but worth watching-for example, we noted that the direct impact of the war on financial systems had so far been limited, but that risks from wider ripple effects might materialize. At that time, some disruptions were already well under way-notably the humanitarian crisis that followed immediately from the invasion. To understand the shape of the era now unfolding, we have tracked the evolution of the war’s disruptions since May 2022. Each of those events changed the global landscape with the sudden release of powerful underlying forces that had been building up around a fault line over time. We have been here before: today’s shocks are reminiscent of the immediate aftermath of World War II (1944–46), the oil crisis (1971–73), and the breakup of the Soviet Union (1989–92). With the passage of time, it seems increasingly likely that the war, coming so soon after a global pandemic, could presage a new economic era. In May 2022, we set out an initial analysis of 12 disruptions that the war could unleash. Russia’s war in Ukraine is an ongoing tragedy, destroying lives and livelihoods in Ukraine and altering economic patterns worldwide.
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