"My opinion is this conflict will not escalate" -  Teknikföretage chief economist Anders Rune (l)

"My opinion is this conflict will not escalate" - Teknikföretage chief economist Anders Rune (l)

A leading Swedish economist says he does not believe simmering tensions surrounding Russia's influence in Eastern Ukraine will escalate into anything more serious.

The stand-off between Moscow and the West following Russia's de facto annexation of Crimea and its continued interest in neighbouring Ukraine, has to a certain extent been pushed off the world's front pages, but uncertainty on its effect on industry remains.

Such jitters have seen month after month of plunging automotive sales in Russia as consumer confidence has been rocked, with The Kremlin introducing a temporary vehicle recycling or scrappage scheme to the end of the year in a bid to boost sales.

Addressing delegates at last week's Scandinavian automotive suppliers (FKG) conference in Gothenburg, Swedish employer body, Teknikföretage, chief economist, Anders Rune, highlighted Russia in the context of global vehicle sales.

"There have been pretty dangerous developments since Crimea," said Rune to the 400-plus audience of component producers. "We export to Russia from major manufacturing industries and the huge impact will be on small companies, the uncertainty we feel around this and therefore we put investments on hold.

"We have to be very critical of [President Vladimir] Putin's regime. Unfortunately, Putin is winning his game - we are too slow.

"If we try to keep our head clear, my opinion is this conflict will not escalate. He [Putin] might move his positions around a bit and test attacks towards Sweden, but in economic terms, this situation will remain, but not escalate."

The chief economist added the overall market situation gave "rise for concern," noting he had expected the global recovery to occur faster. althlough he expects the situation to remain stable for the next year.

Teknikföretagen is an employers' organisation present throughout Sweden, assisting 3,700 engineering companies in labour law and industry issues.

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