Ukraine crisis briefing

The outlook for global growth continues to deteriorate as inflation continues to creep upwards, despite some easing in commodity and oil prices in recent months. Against this backdrop, GlobalData now forecasts the world economy will grow at just 3.1% in 2022, down sharply from the 5.9% growth in 2021. At the same time, the global inflation rate is now projected to rise to 8.4% in 2022 from 3.5% in the previous year, up from 8% in the last report. TS Lombard expects a recession in the US in 2023, and while much of the recent focus has been on the challenges facing the UK, the eurozone area is just as exposed, if not more so. 

There is evidence that western companies are increasingly taking longer-term strategic decisions about pulling out of Russia altogether as packaging demand and confidence evaporate. Mondi has announced it will sell its largest Russian plant for US$1.5bn. Tetra Pak has also declared it would exit its remaining operations after 62 years in Russia; Huhtamaki recently sold its Russian operations to Espetina; and Amcor has announced it will sell three Russian facilities by the end of 2023.  

In addition, rapidly rising input prices in Europe and elsewhere are beginning to have a significant impact on all packaging materials from paper and board to steel/aluminium, plastics and glass, threatening the economic viability of production that may lead to some shutdowns and shortages over the winter of 2022/23. This in turn would lead to further supply constraint and higher prices.