We think that a complete ban on Russian energy imports would cause the prices of Brent crude oil and European natural gas to surge to $160pb and €300/MWh in the near term and settle at still very high levels into next year. The Russian economy would contract by as much as 25%, causing sovereign and corporate default risks to crystallise. Inflation in advanced economies would end the year at around 5% as opposed to the 2.4% we forecast prior to the invasion, and the effects of the drop in households’ spending power and power rationing in Europe would push the euro-zone into recession.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services