The war has caused a lot of destruction in Ukraine and has consequences on the US as well. Some retailers have temporarily stopped their operations in Russia to show corporate condemnation of the war. Other retailers had to stop their operations in Russia because of sanctions. This could have a lot of influence on businesses around the world. Because of COVID retailers already are in difficult times. Retailers are trying to gauge future demand, so they can have the right amount of stock. However, this will be trickier now, because the war in Ukraine could be the cause of continued disruption in the global supply chain. Companies' costs will likely rise during the war. The increase in cost will come from high oil prices and the extra burdens of the disrupted global supply chain. Most companies pass their increase in cost onto the consumer, this will lead to an increase in prices. One of the retailers that will suffer the most are companies that use a lot of energy because Russia is one of the oil suppliers. Other retailers that will suffer a lot are retailers in food because Ukraine and Russia are major agriculture regions.
https://www.cnbc.com/2022/03/03/ukraine-news-retailers-start-warn-of-business-impact-from-russian-invasion.html
I agree with the statements that you have made. The war has caused a lot of economic issues and has caused production to be backed up. The countries that are dependent on Russia's oil will suffer greatly as gas prices are going to rise plus they will have shortages. U.S. gas prices I believe will continue to rise, what is disturbing is that we could be energy independent because we have oil on our land.
ReplyDeleteThe prices of food and resources, especially those produced by some countries related to the war, as well as some of the resources that are subject to trade embargoes, are likely to remain relatively high globally. This may lead to continued global inflation for some time to come.
ReplyDeleteI agree that cost of raw materials will increase given the current economic situation. The pandemic had already led to disruptions in supply chain, and this will only worsen the situation. It will be interesting to see if Fed's increase in interest rates will actually help lower inflation as it could take a while till it happens.
ReplyDeleteI thought your most interesting point was the fact that within Russia, many international businesses and other important figures are refusing to continue their operations in Russia in defiance of the continuing war effort. While I think this is the moral thing to do, I fear that continuing to purposefully damage Russia's economy while have unforseen consequences in the future, as historically, countries who have been "punished" after wars frequently have a bone to pick with the world down the line.
ReplyDeleteRussia will start experiencing a shortage of many goods. Recently, Russia temporarily banned grain exports. It is a sign that Russia is already experiencing a shortage. However, many countries depend on Russia. Russia is the biggest wheat exporter in the world. Many African countries have been importing wheat from Russia. Now, they will have to find another importer, maybe even at a higher price
ReplyDeleteI think it's interesting how American Eagle is taking the war into consideration when forecasting its outlook for the year. I was unsure how much of a financial impact the war would have on consumer demand, as they ship merchandise to 81 countries.
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