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Overshadowed by War and Sanctions

Author

Listed:
  • Vasily Astrov

    (The Vienna Institute for International Economic Studies, wiiw)

  • Alexandra Bykova

    (The Vienna Institute for International Economic Studies, wiiw)

  • Rumen Dobrinsky

    (The Vienna Institute for International Economic Studies, wiiw)

  • Selena Duraković

    (The Vienna Institute for International Economic Studies, wiiw)

  • Richard Grieveson

    (The Vienna Institute for International Economic Studies, wiiw)

  • Doris Hanzl-Weiss

    (The Vienna Institute for International Economic Studies, wiiw)

  • Gabor Hunya

    (The Vienna Institute for International Economic Studies, wiiw)

  • Branimir Jovanović

    (The Vienna Institute for International Economic Studies, wiiw)

  • Artem Kochnev

    (The Vienna Institute for International Economic Studies, wiiw)

  • Niko Korpar

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sebastian Leitner

    (The Vienna Institute for International Economic Studies, wiiw)

  • Isilda Mara

    (The Vienna Institute for International Economic Studies, wiiw)

  • Bernhard Moshammer
  • Olga Pindyuk

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sandor Richter

    (The Vienna Institute for International Economic Studies, wiiw)

  • Bernd Christoph Ströhm

    (The Vienna Institute for International Economic Studies, wiiw)

  • Maryna Tverdostup

    (The Vienna Institute for International Economic Studies, wiiw)

  • Nina Vujanović
  • Zuzana Zavarská

    (The Vienna Institute for International Economic Studies, wiiw)

  • Adam Żurawski

Abstract

Our Spring 2022 Forecast comes at a time of pronounced global uncertainty, arising from Russia’s invasion of Ukraine and wide-ranging Western sanctions on Russia. To take account of this, we distinguish between two extreme scenarios. In the baseline scenario, which assumes no further major Western sanctions and some kind of a ceasefire by the middle of 2022, recessions this year will be confined to Ukraine and the bulk of the CIS; elsewhere in CESEE, growth forecasts have been revised downwards by 1-2 percentage points compared to Winter. However, in the adverse scenario, which assumes a further war escalation and an immediate EU embargo on Russian energy, half of the CESEE region will slide into recession, while inflation will soar into the double-digit range nearly everywhere.

Suggested Citation

  • Vasily Astrov & Alexandra Bykova & Rumen Dobrinsky & Selena Duraković & Richard Grieveson & Doris Hanzl-Weiss & Gabor Hunya & Branimir Jovanović & Artem Kochnev & Niko Korpar & Sebastian Leitner & Isi, 2022. "Overshadowed by War and Sanctions," wiiw Forecast Reports Spring2022, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:fpaper:fc:spring2022
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    File URL: https://wiiw.ac.at/overshadowed-by-war-and-sanctions-dlp-6138.pdf
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    More about this item

    Keywords

    CESEE; economic forecast; Central and Eastern Europe; Western Balkans; EU; euro area; CIS; Ukraine; Turkey; convergence; business cycle; coronavirus; labour markets; unemployment; Russia-Ukraine war; Russia sanctions; commodity prices; price controls; trade disruptions; Ukrainian refugees; energy embargo; monetary policy; fiscal policy; impact on Austria;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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