The IMF warned on Saturday that the global economic impacts of the war in Ukraine unleashed by the Russian invasion would be “even more devastating” if the conflict escalates.
“While the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic fallout is already very serious,” the IMF said in a statement released today.
“If the conflict intensifies, the economic damage would be even more devastating,” said the agency, reported the AFP agency.
The rise in energy prices and raw materials in general, with a barrel of oil trading at around US$120, adds to the rise in inflation that the world was already experiencing at the end of the Covid-19 pandemic.
“The jump in prices will have effects throughout the world, particularly in low-income households for whom food and energy expenses represent a greater proportion” of their budget than the average, the agency advanced.
As for Ukraine, “it is already clear” that the country would have to face “significant” costs related to the revival of the economy and the reconstruction of totally destroyed or damaged buildings and facilities.
According to the IMF, the emergency financial assistance requested by Ukraine, and which the entity had reported on February 25, amounted to US$1.4 billion.
The request could be formally submitted to the IMF’s board of directors “as early as next week,” according to the press release.
Countries that have close relations with Ukraine and Russia are “particularly at risk of shortages and supply problems,” the IMF stresses.