Washington. Russia could be doomed to bankruptcy due to the economic sanctions and financial restrictions that the international community has imposed on this country for having invaded Ukraine, according to the International Monetary Fund (IMF).
And the conflict can also have strong consequences for the global economy according to the director of the Fund, Kristalina Georgieva.
“Russia’s bankruptcy is no longer an unlikely event,” Georgieva said in a digital meeting with several international media in which she warned that the Russian economy is already contracting and is headed for a deep recession this year.
As he explained, the duration of the war and the sanctions, as well as the possibility that they become more severe and affect energy exports, will be the key elements to determine the magnitude of the recession.
The IMF also warned of the serious consequences for the global economy of the war, especially for the neighboring countries of Russia and Ukraine but also for the rest of the planet.
“We went through an unparalleled crisis with the pandemic. And now we find ourselves in even more inconceivable territory: war in Europe,” Georgieva said.
He pointed out three direct consequences of the conflict for the global economy: the increase in the prices of raw materials, the reduction in global purchasing power due to inflation, and the impact on world financial conditions and business confidence.
Regarding the institution’s ties with Russia, Georgieva indicated that the entity’s office in Moscow is closed, that the IMF does not currently have any ongoing operations with that country and that the reserve funds that Russia has in the organization they are practically inaccessible precisely because of the sanctions of other countries.
Regarding a hypothetical expulsion of Russia from the IMF, the managing director explained that the only way contemplated by the statutes of the institution to expel a member is the violation of its financial obligations, something that the Russians have not done to date and that therefore this is a scenario that the Fund does not contemplate.
The IMF held this meeting a day after its executive board approved the disbursement of 1.4 billion dollars in emergency aid to Ukraine, and warned that the war will cause a “deep recession” in the country.
The amount approved by the Fund matches that requested by the Ukrainian Government, and will serve to “mitigate the economic impact” of the war started by Russia, the IMF said in a statement in which Georgieva admitted that Ukraine’s financing needs are “big, urgent” and can grow.
