MINNEAPOLIS — What's unfolding in Ukraine is already taking on a toll on the global market and economy, and the fear is, according to economists, is it could cancel out efforts being made to recover from the economic crisis brought on by the pandemic.
"It's something to be nervous about," said University of Minnesota Economics professor Tim Kehoe.
The price of oil was already over $100 dollars a barrel as of Thursday for the first time since 2014, while the price for European gas is up 62%.
A major increase, which is concerning for Kehoe.
"Western Europe is going to see big increases in prices for energy and for food and some of that, because there's world markets involved, are going to spill over to us," said Kehoe.
Prices for goods like wheat are expected to skyrocket with Ukraine and Russia being two of the largest exporters of wheat to western Europe.
"We grow our own wheat, but the price of wheat on the world market is going to be higher and American wheat farmers are going to want to export their grain to Europe, and that'll be a little extra push to our inflation," explained Kehoe.
Forcing all of us to shell out more money for necessities like fuel and energy, and spending less on other goods and services that are "wants," like travel and nights out.
"It affects people's desire to invest, to hire new workers, and this is what the economy runs on," said Kehoe.
The overall economic impact of this conflict, experts say, will depend on how long the conflict lasts.
Another factor, is whether or not Russia will retaliate with cyber attacks to businesses and public services in response to the sanctions being placed on them.
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