IMF chief: Ukraine war and inflation threaten global economy
The head of the International Monetary Fund alerted that Russias war against Ukraine was weakening the economic potential customers for the majority of the worlds countries and called high inflation “a clear and present risk”to the global economyBy PAUL WISEMAN AP Economics WriterApril 14, 2022, 2:06 PM – 3 minutes readShare to FacebookShare to TwitterEmail this articleWASHINGTON– The head of the International Monetary Fund warned Thursday that Russias war versus Ukraine was compromising the economic potential customers for most of the worlds countries and called high inflation “a clear and present risk”to the global economy.IMF Managing Director Kristalina Georgieva stated the effects of Russias intrusion was adding to financial downgrades for 143 countries, although most of them need to continue to grow. The war has disrupted global trade in energy and grain and is threatening to trigger food shortages in Africa and Middle East.Georgieva made her remarks in a speech on the eve of next weeks spring meetings of the IMF and the World Bank in Washington.An all of a sudden strong healing from 2020s pandemic recession has caught businesses by surprise, leaving factories, ports and freight backyards not able to keep up with robust consumer need and requiring prices higher.Chronically high inflation, which is forcing the worlds reserve banks to raise rates of interest and likely slow financial development while doing so, totals up to “a massive obstacle for the worldwide healing,”Georgieva said.Georgieva likewise cautioned of “the fragmentation of the world economy into geopolitical blocs,” with the West imposing significant sanctions on Russia and China revealing assistance for the autocratic Russian regime of President Vladimir Putin.”In a world where war in Europe develops hunger in Africa; where a pandemic can circle the globe in days and resound for many years; where emissions anywhere mean increasing sea levels practically everywhere– the danger to our cumulative success from a breakdown in international cooperation can not be overemphasized,” Georgieva said.Before the war, Russia and Ukraine had supplied 28% of international wheat exports. And Russia and Belarus accounted for 40% of exports of the fertilizer potash.”Now,”Georgieva said, “grain and corn costs are skyrocketing, and leaders across Africa and the Middle East are telling me that products are running low. Food insecurity is a serious concern.”We must act now with a multilateral effort to strengthen food security. The alternative is dire: More appetite, more poverty and more social unrest– especially for nations that have struggled to leave fragility and dispute for many years.” Georgieva gotten in touch with the world to support the Ukrainians and noted that the IMF had provided $1.4 billion in emergency funding to help Ukraine fulfill its instant spending requirements. The IMF is likewise offering assistance to Ukraines next-door neighbors, consisting of Moldova, which has actually accepted more than 400,000 war refugees.—— This story has been corrected to reveal that the IMF expects the Ukraine war to add to weaker financial development for 143 nations, not 186.