The Russian invasion of Ukraine added stress to a global economy that was just recovering from the effects of the coronavirus disease (COVID-19) pandemic. In Asia and the Pacific, the greatest economic impact of the invasion has been among economies in Central and West Asia due to their geographic proximity, historical ties, and strong economic links with the Russian Federation. The region has not yet fully absorbed the macroeconomic effects as some are longer term than others. The region may be close to both the Russian Federation and Ukraine, but countries still showed some degree of economic resilience to impact of trade sanctions.

Nonetheless, disruptions to global supply chains will continue to affect the region, particularly as economies seek alternative trade routes or invest in import substitution.

The invasion and associated global sanctions against the Russian Federation have affected the region’s business operations, including those of micro, small, and medium-sized enterprises (MSMEs), as one-third of them export at least some products. In Central and West Asia, MSMEs contribute a significant share of gross domestic product (GDP).