[Free to access upon setting up an account] Beyond the devastating human costs, the Russia-Ukraine conflict is disrupting economic conditions and financial and credit markets--with implications for S&P’s credit ratings. Since the conflict began and the subsequent imposition of strict sanctions on Russia by the international community, many macroeconomic and credit implications have begun to reshape markets and the international order.

The Ukraine crisis presents a myriad of risks to the sector – direct underwriting losses, rapidly rising prices, slower economic growth, financial market volatility and the potential for asset shocks – that are not altogether different to what occurred during COVID-19 and the financial crisis. But with direct investment and underwriting exposures limited overall, and with second order effects in financial markets currently manageable, the sector is strongly positioned to support clients through this period of uncertainty.

The entire global economy will feel the effects of slower growth and faster inflation. Impacts will flow through three main channels – higher prices for commodities like food and energy will push up inflation further; neighboring economies in particular will grapple with disrupted trade, supply chains, and remittances as well as an historic surge in refugee flows; reduced business confidence and higher investor uncertainty will weigh on asset prices.

The 17th edition of the Global Risks Report identifies tensions that will result from diverging trajectories and approaches within and between countries and then examines the risks that could arise from such tensions. This year’s report also highlights the implications of these risks for individuals, governments and businesses.