Australian not immune from economic impact of Russia's war on Ukraine: PM Morrison

By Islamuddin Sajid

ANKARA (AA) – Australia is “not immune” from the economic fallout of Russia’s war on Ukraine, which will be “profound” in the longer run, the country’s prime minister said on Tuesday.

“Europe will, of course, suffer the biggest economic impacts from Russia’s aggression,” Scott Morrison said in a virtual address to the Australian Financial Review (AFP) business summit.

“The uncertainty caused by the conflict - and how bad it might get, and is likely to get - is already having negative confidence effects that are weighing on both financial markets and Europe’s real economy.”

However, he warned that the economic implications of Moscow’s “brutal, unprovoked and unconscionable” actions “are wider than just Europe.”

“Global oil prices have traded over $130, the highest since 2008. And this reflects expectations of supply interruptions for many months to come,” he said.

Australia is likely to witness limited direct impact because its “merchandise trade with Russia and Ukraine is 0.2% of our total two-way trade with the rest of the world,” Morrison added.

“Commodity price rises will be the most obvious transmission channel to Australia. Petrol prices in Australia have risen, like they are elsewhere,” the premier said.

“We are not immune from the negative impacts of Russia’s invasion of Ukraine on global growth as well. And there are some supply chains for important imports that run through Russia and Ukraine that may be disrupted, and have our close attention.”

Morrison cited urea ammonium nitrate supplies to Australia’s agricultural sector as an example, saying that his government is “closely monitoring supply and working with the industry to ensure we have alternatives.”

“These are just the first order impacts of Russia’s actions. The longer term geostrategic and economic implications, though, are much more profound,” he said.

“Russia’s actions undermine global stability and the global order that has delivered so much to our world. This is a moment of truth for all countries who say they value global rules and norms based on respect for international law and the sovereignty of all nations.”

Australia was quick to impose economic sanctions on Moscow, including a trade embargo on the Luhansk and Donetsk regions, which Russia has recognized as “independent republics.”

The government barred trade with these regions in the transportation, energy, telecommunications, oil, gas, and minerals sectors.

Canberra also barred Australian people and companies from doing business with five Russian banks – Rossiya Bank, Promsvyazbank, IS Bank, Genbank, and the Black Sea Bank for Development and Reconstruction.