The International Monetary Fund on Saturday said that the economic consequences of the war in Ukraine were “already very serious”.
“Price shocks will have an impact worldwide,” the body said in a statement. “Especially on poor households for whom food and fuel are a higher proportion of expenses.”
The global lender made the warning after it held a board meeting chaired by Managing Director Kristalina Georgieva.
The Russian invasion of Ukraine that began on February 24 entered its eleventh day on Sunday. Putin has described the invasion as a “special military operation” aimed at dislodging “neo-Nazis” ruling Ukraine.
The invasion has so far resulted in the deaths of at least 351 civilians and over 6,00,000 have fled Ukraine, according to the United Nations human rights office. On the Russian side, over 498 of its troops have died, according to the country’s military.
Several countries, including the United States and the European Union, have imposed severe sanctions on Moscow, resulting in record-high prices of crude oil and fear of supply chain disruptions.
On Saturday, the International Monetary Fund said the sanctions on Russia will have a substantial impact on the global economy and financial markets, with significant spillovers to other countries.
“In many countries, the crisis is creating an adverse shock to both inflation and activity, amid already elevated price pressures,” the body said. “Monetary authorities will need to carefully monitor the pass-through of rising international prices to domestic inflation, to calibrate appropriate responses.”
The global lender also said it will discuss Ukraine’s request for $1.4 billion in emergency financing to its board for approval as early as next week and was in talks about funding options with authorities in neighbouring Moldova.
Ukrainian authorities had sought emergency financing from the International Monetary Fund on February 25, a day after Russia invaded the country.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!