NEWSWATCH: “The Economic Ramifications of Conflict in Ukraine” – Stratfor

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

The conflict in eastern Ukraine has dealt a particularly heavy blow to its economic relationship with Russia. Much of Ukraine’s industrial production was taken offline …. The country lost a sizable share of its exports … [and]  GDP saw a double-digit contraction. Kiev… [the EU] and [the] United States, slapped Russia with sanctions … [over] Crimea and Donbas; Moscow responded in kind …. the Ukrainian government began to draw down … imports of Russian natural gas in response to a pricing dispute … looking for new energy partners … it began importing reverse-flow natural gas supplies from neighboring EU states such as Poland, Hungary and Slovakia. (… [which] still technically originated from Russia … [but not] subject to the same contractual conditions ….) By … 2016, Ukraine had halted all … natural gas imports from [Russia]. … these moves have cut deeply into cross-border trade …. * * * By all appearances, the Ukrainian and Russian economies seem certain to keep drifting apart …. Ukraine will look to other markets, especially Europe, for new export destinations and energy supplies.

Click here for: “The Economic Ramifications of Conflict in Ukraine” – Stratfor