July 6, 2022

IMF lowers global growth forecasts for Russia-Ukraine war

A scene of damage on April 17, 2022 in the Ukrainian city of Mariupol, controlled by the Russian military and pro-Russian separatists.

Anatolic Agency | Anatolic Agency | Getty Images

The International Monetary Fund on Tuesday downgraded its global growth forecasts for 2022 and 2023, hitting the economy. Occupation of Ukraine without Russian incitement “Spread far and wide.”

The Washington-based company has now forecast a GDP growth rate of 3.6% for the world economy this year and 2023. This represents a drop of 0.8 and 0.2 percentage points, respectively, from its forecasts released in January.

In a blog post on Tuesday, Pierre-Olivier Gourinchas, IMF’s economic adviser, noted the release of the IMF’s latest World Economic Outlook report: “Global economic prospects have been severely pushed back.

Russia began its invasion of Ukraine on February 24 with officials such as NATO’s Jens Stoltenberg, hoping that Moscow would control its neighbor.

“The effects of the war will spread far and wide, adding to price pressures and exacerbating significant policy challenges,” Gaurinjas said in a blog post.

The The World Bank also lowered its global growth expectations At the beginning of this week, the growth rate, which was 4.1% in 2022, is now estimated at 3.2%.

Ukraine 35% deal

It is imposed by the United States, Canada, the United Kingdom and the European Union Several rounds of sanctions targeting Russian banks, oligarchy and energy.

The IMF said the fines would have a severe impact on the Russian economy, which estimates the country’s GDP will fall by 8.5% this year and 2.3% by 2023.

However, the financial sector still predicts a darker outlook for the Ukrainian economy.

“By 2022, the Ukrainian economy is expected to shrink by 35%,” the IMF said in its latest economic assessment, adding that “accurate analysis of economic success is unlikely”.

“Even if the war ends soon, the loss of life, the destruction of physical capital and the flight of civilians will severely hamper economic activity for many years to come,” the agency said.

Inflation is a ‘risk’