This is at Goldman Sachs where we discuss development shaping industries, markets and the global economy.

I'm Allison Nathan a senior strategist in Goldman Sachs research.

In today's episode we're going to discuss the implications of the Russia Ukraine conflict on the global economy and markets.

To do that, I'm joined by my colleagues in Goldman Sachs research, Dan Stroyven, senior

global economist, Peter Oppenheimer, Chief Equity Strategist,

and Kamakshia Trevetti,

co-head of Global Foreign Exchange,

Interest Rights, and Emerging Market Strategy Research.

We'll first turn to Dan Stroven for his views

on the implications of the conflict for the global economy.

Dan, welcome to the program.

Hi listen, thanks for having me.

So Dan, set the stage for us in what ways can the Russia-Ukraine conflict affect the global economy?

Great, so yeah at the end of the day the most devastating aspect of this war is of course

the humanitarian costs. That being said given our expertise let me walk you through what I think are the key for economic channels through which the invasion will affect the global economy.

First of all, the direct hit to GDP in the region. Second second lower exports from the rest of the world to the region,

third lower commodity supply by Russia and Ukraine to the rest of the world, and then finally

tighter financial conditions.

Starting with the direct effect, the impact in the region could be very large, but

given the relatively limited weight of the region in global GDP, with both countries added together accounting for roughly 2% of global GDP

on a market basis and 3.5% on a global

PPP weighted basis, the impact on global growth is not going to be huge. To give an example, one

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