The global economy likely won’t be able to avoid a recession without a resumption of Russian energy exports this year, according to a study by Federal Reserve Bank of Dallas economists.
“If the bulk of Russian energy exports is off the market for the remainder of 2022, a global economic downturn seems unavoidable,” economists Lutz Kilian and Michael Plante wrote in an article posted by the Dallas Fed Tuesday. “This slowdown could be more protracted than that in 1991.”
The authors drew a parallel to the 1991 global recession, set off by Iraq’s invasion of Kuwait in the year prior that caused an oil-supply shock. Back then, Saudi Arabia partly reduced the impact by pledging to ramp up production, helping ensure what the researchers called “only a brief U.S. recession,” which lasted less than a year.
