In parallel, the war is likely to accelerate two ongoing structural changes which, during the transition they entail, could lead to further negative supply shocks and cost pressures.
First, as I argued recently, the war may prove to be a tipping point, causing geopolitics to become more important for the structure of global supply chains.2 This will not necessarily imply deglobalisation – international firms will still face strong incentives to organise production where costs are lowest – but it might restrict the perimeter in which they can do so.