After the executive board meeting on March 4, the IMF issued a staff statement on the economic consequences of the war in Ukraine on Saturday. The conference was convened by Kristalina Georgieva, managing director of the International Monetary Fund, according to the article. The IMF’s forecast is bleak, and the international financial agency has taken notice of the recent surge in energy and commodity prices.
According to the IMF’s assessment, all of this has increased to “inflationary pressures from supply chain interruptions,” which could slow the recovery of the Covid19 epidemic. “Price shocks will have an impact worldwide,” the IMF continues, “particularly on poor households for whom food and gasoline account for a higher proportion of expenses.”
The IMF paper explains how war-related issues could wreak havoc on economies in a variety of countries. “Should the dispute continue, the economic damage will be far more devastating – Russia’s sanctions will have a big impact on the global economy and financial markets, with considerable spillovers to other countries,” the IMF communications department says.
The IMF’s pronouncements were released on Saturday in response to recent signs of a looming recession, with one analyst speculating that the economic repercussions could be “10 times worse than the Great Depression.” Inflation has risen, and investors are concerned that hawkish central banks will raise interest rates and reduce big asset purchases. The Federal Reserve in the United States is expected to raise the benchmark interest rate, but some believe the ongoing war in Europe will prevent this.
Ukraine’s essential infrastructure has been damaged, according to the IMF. The IMF announced last week that the country has $2.2 billion in cash available until the end of June. Furthermore, the IMF said on March 1 that the World Bank Consortium, a group of five international institutions that offers leveraged loans to governments, is “preparing a $3 billion package of help in the coming months.”
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