Effects of Russia's Ukraine invasion will be felt by SA, experts say

While Russia’s military action in Ukraine might seem far away its effect is already being felt in SA markets.

Economist Dawie Roodt said the first effect will be an increase in the oil price, which has risen to just more than $100 (roughly R1,541) in the immediate aftermath of the invasion.

“The rand is weakened. Investors feel frightened and tend to run away from risky assets and hide in safer places, including the stronger markets.

“The first effect of the attack will be the financial markets and we are seeing that now,” Roodt said.

With oil prices going up and the weak rand, fuel prices will increase.

“Interests rates will go up and will affect economic growth. We are exporting less. What is happening in central Europe is having an effect on emerging economies,” Roodt said.

Thembisa Fakude, a senior research fellow at the Africa-Asia Dialogue, told Radio 702 on Thursday the attack will affect SA because supplies of oil and gas are going to be disturbed.

“We have seen in the past whenever there is a disturbance in oil supplies the smaller countries tend to redirect their produce into Europe, which will suffocate the supplies coming our way,” Fakude said.

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