The economic consequences of the Russia-Ukraine war are unlikely to end suddenly but will only fade over time, said Prince Max von und zu Liechtenstein, chairman of the LGT Group, a private bank with $300 billion of assets under management owned by Liechtenstein’s royal family. In an interview, von und zu Liechtenstein said even if military operations cease, the economic impacts will likely linger. Edited excerpts:

Many analysts are predicting a recession in the West. Do you expect it to be as sharp as 2008-09?
For Europe, the likelihood of a recession is very high due to elevated energy prices. However, many governments across Europe, including Spain, Portugal, France, Germany, and, most notably, the UK, have announced fiscal support to alleviate their cost-of-living challenges. These will cushion the blow. Unlike 2008-09, the current situation does not resemble a financial meltdown. In contrast to Europe, the US remains resilient, and with excess savings and record-low unemployment, we do not expect a real recession there Asian economies. At the same time, most will likely not see one.

Europe has been most impacted by the Russia-Ukraine war. How long do you expect the pain to last?
All political outcomes are difficult to predict, which also applies to the Ukraine war. Multiple countries have been drawn into the conflict, but the indirect impact is global, from food shortages affecting developing countries to the volatility in energy prices that every country has to bear. Even if military operations cease, the economic impacts will likely linger. This generational event has changed the way European security policies have been formulated since the Second World War. That is why we believe the economic consequences will likely not end suddenly but fade over time.

How long will the crisis in the global economy last?
The current global economy is severely challenged by inflation and tightening monetary policies, but we would not call it a crisis. The world had seen the same economic challenges before, though the last comparable instance was in the 1970s. Excess savings built up over the last two pandemic years, and pent-up demand means that tighter monetary policies may take longer to have any effect, but we believe they will eventually work. At present, we expect global economic growth to trend below potential in 2023 but then strengthen in 2024.

Where does India figure in your list of investment destinations?
The Indian market has significant growth potential. Foray into the Indian private banking market is an important step in the expansion of our Asia business and the continued pursuit of our international growth strategy.

What is LGT India’s strategy?
In the next five years, we aim to be one of the top-three private client businesses in the country.