Malta and Portugal least affected by the war in Ukraine

Risks are mostly indirect

A study by the European Commission on the vulnerability of Member States to the effects of the war in Ukraine shows that Malta and Portugal are the least exposed to the economic consequences of sanctions, supply problems, rising energy and fuel costs, and inflation on the whole.

The Baltic countries and those in Central and Eastern Europe are most affected economically by the war, particularly because of the importance Russia has for their economies, more specifically for gas supply.

Cyprus, a popular holiday destination for Russians, has seen its tourism market take a hammering, while its financial sector has been hit because of the high level of financial assets held by wealthy Russians on the island republic.

But of all the Member States, Poland comes out as the most vulnerable to economic shocks because of the importance the Russian market has for the country, and its reliance on Russian energy to supply gas for electricity.

However, Malta and Portugal closed the ranking as the two countries which were least exposed to the economic, financial and commercial fallout from the war between Russia and Ukraine.

This is partly because the Portuguese economy was the one that most grew in the EU (5.8%) in 2022 according to forecasts from the EU Commission released on Monday, and it was also the country with the lowest inflation rate (4.4%).

“In the light of Portugal’s low direct exposure to the region affected, risks are mostly indirect, with inflation affecting raw materials, fuel security, and uncertainty over world demand,” says the European Commission.