Russia invasion of Ukraine will have significant economic repercussions, impacting global economic recoverywarned IMF Managing Director Kristalina Georgieva on Thusday.
Following Russia invasion of her neighbor, Georgieva said she was “deeply concerned”and warned that the fights”adds important economic risk for the region and the world.”
The Monetary Fund international continues to assess the economic impact, but “will stand ready to support our members as needed,” she said. on Twitter.
The Washington-based crisis lender is in the process of deploying $2.2 billion in assistance to Ukraine under a loan program set to finish in June, but Georgieva said the fund could provide additional help if needed.
the building conflict already caused oil prices to skyrocket highest level since 2014, adding to concern global inflationary pressures.
The United States and European powers later Thursday are expected to increase up economic sanctions against Russia, which economists warn also could bite the global economy reeling from the impact of the omicron variant of COVID-19[FEMALE[FEMININE
In January, the IMF reduced its world GDP forecasts for 2022 at 4.4%, half a point less than son previous estimate in October, due to “impediments” caused speak latest virus outbreak.
Among the sanctions expected, Washington and Brussels could target the big Russian banks, cutting their off of SWIFT, the global Messaging system used to move money around world.
This would hamper Russia ability enjoy the global energy marketwhich largely works in U.S. dollars.
However, analysts note that Moscow has prepared for years to resist such sanctions, building up a war chest of cash and gold, and has very little debt.
“It’s no coincidence. I think a lot of it is of what we call fortress russia strategy”, said Elina Ribakova of the institute of International finance, a global banking group.
“It was a very deliberate change in macroeconomic policy to meet geopolitical ambitions,” she told Agence France-Presse (AFP). “They have a piggy bank bank who can protect them.”
The conflict could also change the Federal Reserve’s calculus when it comes to fighting inflation in the United States, a powerhouse bank official said Thursday.
The Fed next month should increase rates for the first time since COVID-19 broke out but it may take move more aggressively if the Ukraine crisis disrupts commodities and drives up prices.
Loretta Mester, President of the Cleveland Federal Reserve Bank, said the central bank monitor the impact of the conflict on the world is the most grand economy.
“The implications of the unfolding situation in Ukraine for the way-run economic perspective in the United States will also be a consideration in determine the right pace at which to remove housing,” she said in a speech.