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More than 140 economies face downgrades of their economic outlooks this year due to the impact of Russia’s invasion of Ukraine, which is pushing up energy and food prices around the world, International Monetary Fund chief Kristalina Georgieva said Thursday.
In a speech ahead of spring meetings of the IMF and World Bank next week, Georgieva also warned that inflation, for the first time in many years, has become “a clear and present danger” for many countries, constituting “a massive setback for the global recovery.”
International Monetary Fund Managing Director Kristalina Georgieva. (Getty/Kyodo)
While most countries can expect their economic growth to remain in positive territory, the impact of the war will contribute to downward revisions in 2022 for 143 economies accounting for 86 percent of global gross domestic product, she said.
The IMF is set to release its flagship World Economic Outlook report on Tuesday, in which it is expected to slash expected global growth for both 2022 and 2023, she said.
It will be a further downgrade from January, when the IMF cut its global growth forecast for 2022 by 0.5 percentage point from its October estimate to 4.4 percent as coronavirus pandemic-linked supply disruptions and inflation weighed on the United States and China.
Since January, the outlook has “deteriorated substantially, largely because of the war and its repercussions,” the IMF managing director said.
Inflation, financial tightening and frequent, wide-ranging COVID-19 lockdowns in China are causing new bottlenecks in global supply chains and weighing on economic activity, she said.
She added that food insecurity is a “grave concern” and called for immediate action through a multilateral initiative.
Before the war, which began in late February, Russia and Ukraine provided 28 percent of global wheat exports. Russia and Belarus, which is supporting Moscow in its military aggression, supplied 40 percent of exports of potash, a crucial fertilizer, according to the IMF.
But grain and corn prices are soaring and countries in Africa and the Middle East are warning that supplies are running low, Georgieva said.
“For advanced economies, inflation is already reaching a four-decade high. And we now project it to remain elevated for longer than previously estimated,” she said.
Related coverage:
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IMF to cut global growth forecast in April amid Russian invasion
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