IMF chief: Ukraine war and inflation threaten global economy

WASHINGTON

The International Monetary Fund’s head warned Thursday that Russia’s aggression against Ukraine would affect the economic prospects of most countries around the world. He called high inflation “a present and clear danger” to the global economy.

IMF managing director Kristalina Georgieva saidAlthough most countries should continue to expand, the economic impact of Russia’s invasion had a negative effect on 143 countries. The war has disrupted world trade in energy and grains and is threatening food shortages across Africa and the Middle East.

Georgieva made her remarks in prepared remarks for a speech to be delivered on the eve next week of the spring meetings of IMF/World Bank in Washington.

Businesses have been surprised by the unexpectedly strong recovery following 2020’s pandemic recession. This has left factories, ports, and freight yards unable meet robust customer demand, and forced prices higher.

Georgieva says that the persistently high inflation is a major setback in global recovery efforts. It has forced the central banks around the globe to raise interest rates. said.

Georgieva warned also of “the fragmentation and the geopolitical blocs of the global economy,” with the West imposing severe sanctions on Russia, China, and expressing support for President Vladimir Putin’s autocratic Russian regime.

Georgieva: “In a world that war in Europe leads to hunger in Africa, where pandemics can spread quickly around the globe and reverberate over years; where global warming is almost always a threat to our collective prosperity — the threat of our collective prosperity from a collapse in global cooperation cannot been overstated.” said.

Russia and Ukraine supplied 28% of the global wheat exports before the war. Russia and Belarus also accounted for 40% in exports of fertilizer potash.

Georgieva, “Now” saidAccording to the report, “grain and grain prices are on the rise, and leaders in Africa and Middle East tell me that there is a shortage of food. Food insecurity is a serious problem.

“We need to act immediately with a multilateral effort to improve food security. The alternative is worse: More hunger, more poverty, and more social unrest, especially in countries that have struggled over many years to escape conflict or fragility.

Georgieva urged the world to support Ukraine and pointed out that the IMF had provided US$1.4 billion of emergency financing to Ukraine to meet its immediate needs. The IMF also offers assistance to Ukraine’s neighbors, including Moldova, that has received more than 400,000 refugees from war.