All of Europe was recovering from the impacts of the pandemic when Ukraine was attacked by Russia. Since then, almost three months later, the economic consequences have spread across Europe. However, Portugal remains at the bottom of the list of countries vulnerable to this conflict.

“Reflecting geographical proximity and important trade links, the war in Ukraine weighs on the European economy more severely than on other major economies, such as the US or China. In turn, within the EU, Member States have different degrees of exposure to some of the channels of transmission of the impact of the war”, said the report.

In a graph made by the European Commissions, the Baltic countries and the Central and Eastern European countries appear as the most vulnerable. The reason for this may be the high energy intensity of their economies and the importance of Russia in trade.

Among the largest Member States, Poland is the most vulnerable country due to the high exposure of trade with Russia as well as the importance of Russian energy in the energy consumption of citizens. Poland is followed by the Netherlands, Germany and Italy with exposure in line with the European average. "Still in the major economies, France and Spain are among the least exposed," they added.

As for the large economies: “For the Netherlands, the vulnerability largely relates to assets and households’ vulnerability to high energy prices, while for Italy and Germany it reflects a combination of the importance of Russian gas imports in gross available energy, asset exposure and households’ vulnerability. Finally, France and Spain emerge, on average, as the least exposed large EU Member States”, the report points out.

Portugal and Malta "close the ranking" as the European Union member states least exposed to the effects of war. This may explain why the Portuguese economy will be the fastest growing (5.8 percent) in 2022, according to European Commission forecasts released on 16 May, and at the same time is the country with the lowest inflation rate (4.4 percent).

In their analysis of the Portuguese economy, European experts recognise the risks. However, “in the light of Portugal’s low direct exposure to the affected region, these risks are mostly indirect, stemming from commodity prices, security of supplies and uncertainty in global demand," explains the European Commission.