Georgieva noted in Washington that “We have a tragic impact from the war against Ukraine, we have a major contraction in Russia and we see the likely impact on our prospects for the world economy.”
The IMF official added that “Next month (during the spring meetings) we will have a downward revision of our global growth projections.”
The Spring Assembly of the IMF and the World Bank will be held next month virtually from the agency’s headquarters in Washington.
With the world economy still not recovering from the coronavirus pandemic, “a crisis different from others”, is now going through “an even more shocking territory”Georgieva stressed. “The unthinkable occurs: we have a war in Europe,” she summed up.
Regarding the impact on the Russian economy, the head of the Fund stressed that the sanctions imposed by the allied countries, which he described as “unprecedented”, lead to “a brutal contraction of the Russian economy and a deep recession”.
Georgieva described the effects in Russia as a “currency depreciation that feeds inflation or collapse of purchasing power and standard of living of a large majority of the population.”
“The effects on neighboring countries are equally important, particularly in the countries most integrated into the Ukrainian and Russian economies,” he explained, mentioning the countries of Central Asia, Moldova or the Baltic countries.
“A default of Russia?”, Georgieva asked herself, and then replied that “I am not going to speculate on what may or may not happen, but just say that we are no longer talking about a Russian payment default as an unlikely event.”
The director of the IMF explained that the problem is not the availability of money but the inability to use it since the country was isolated from the world financial system. The IMF has no ongoing credit programs with Moscow.
Georgieva said that the agency is ready to help Ukraine and on Wednesday the IMF approved aid of 1.4 billion dollars.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
