Inflation and supply chain

Larry Fink, CEO of BlackRock, the world's largest asset management company, said that the reason for inflation is not demand, but the disruptions in supply chains that increase inflation. Defending that the demand has not changed compared to the 2019 level, Fink said:"We have a really high inflation, most of it is created by politics. The truth is that we have supply problems, the Russia-Ukraine war has aggravated these supply problems." Fink also emphasized that he believes the inflation problem will be resolved over time as supply chains gradually recover and if the Fed focuses on tightening monetary policy. Expressing that, he is not sure whether there is a recession risk, Fink said:"If there is a recession risk, it is quite moderate. America's financial fundamentals are stronger than they have ever been."

Supply chain and transportation,

A consequence of the Russian war also creates new threats and opportunities on trade routes.

The war in Ukraine has hit the land part of the Chinese Belt and Road (BRI) project (New Eurasian Land Bridge, NELB) the most, extending to Europe via Central Asia and Russia. The sanctions resulted not only in the mass withdrawal of shipping companies from Russia, but also in restrictions on traffic on Russia's border with Poland, Estonia, Latvia and Lithuania. In this case, Central Asia - Iran - Turkey is an increasingly preferred transportation route. However, in this case, there will be a "bottleneck" in the transport sector. So this means much lower road capacity due to the lack of improved rail links that carry 20 times more goods than trucks. The development of new trade routes bypassing the conflict zone and sanctioned Russia can significantly weaken the place and importance of eastern European countries in the global distribution network.