IMF lowers global growth forecast due to Ukraine war

Created: 03/10/2022, 22:27

The International Monetary Fund logo at its headquarters in Washington.

© Jim Lo Scalzo/EPA/dpa

The head of the IMF warns that the war will have “massive” economic consequences for Ukraine.

But the global economy will also suffer.

In April, the IMF corrects its forecast.

She will be gloomy.

WASHINGTON - The International Monetary Fund (IMF) is lowering its forecast for global economic growth in the coming month due to the consequences of Russia's aggressive war in Ukraine.

This was announced by IMF boss Kristalina Georgiewa on Thursday.

“First we are experiencing a crisis like no other with the pandemic.

And now we're in even more shocking territory.

The unthinkable happened - we have a war in Europe," said the Bulgarian.

In addition to human suffering, the war is also leading to massive economic upheavals - for Ukraine, for Russia and beyond, Georgieva warned.

The war will lead to higher commodity prices, further fueling inflation and contributing to a worsening business climate and tighter financing conditions.

Updated forecast in April

In its January forecast, the IMF still expected global economic growth of 4.4 percent for this year.

As planned, the IMF will present an updated forecast in April.

Georgieva warned that the war would have “massive” economic consequences for Ukraine.

"The damage to the infrastructure is already massive." In addition, there is a movement of refugees that has not been seen in Europe since the Second World War.

"Even if the fighting ended now, the cost of recovery and reconstruction would already be massive," Georgieva said.

The IMF already granted the country an emergency loan of 1.4 billion US dollars on Wednesday and is ready to help beyond that.

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Russia, on the other hand, is facing a "deep recession" due to the "unprecedented sanctions," Georgieva said.

The depreciation of the national currency, the ruble, leads to higher inflation, which "significantly weakens the purchasing power and standard of living for a large part of the Russian population," she explained.

dpa