Estonian expert: War in Ukraine to lead to higher energy, food prices

TALLINN – The war between Russia and Ukraine will bring with it an increase in energy and food prices and create volatility on the Baltic stock markets, Kristjan Liivamae, senior lecturer at the Department of Economics and Finance of Tallinn University of Technology, says.

"Companies that are directly connected with Russia and Belarus will suffer significantly more and the prices of their shares may fall significantly, as Russia has imposed sanctions on foreign companies in Russia," Liivamagi told BNS on Monday. 

"One example here is Silvano Fashion Group, which is significantly affected by the Russian sanctions," he said.

Liivamagi forecasts a further decline in Russian stock markets.

"The impact on Europe, the US and other markets is also there, although it is clearly milder," he said.

According to the senior lecturer, the size and extent of the impact depends primarily on how much the country was involved in trade with Russia and the extent to which money of Russian companies and citizens was deposited or loans were granted to Russian businesses. 

Liivamae believes that the sanctions imposed on the Central Bank of Russia, the country's commercial banks and financial institutions are very strong and have a significant negative impact on the functioning and sustainability of the Russian financial system.  

"In my view, these are very strong sanctions that clearly damage Russia's financial stability and the functioning of the financial system. All this has a big and significant negative impact on Russian companies and the Russian stock market," he emphasized.