Business & Economy

Russia’s war in Ukraine drives downturn in global economic growth, IMF says

Washington, Apr 19 (EFE).- The war in Ukraine and rising inflation levels prompted the International Monetary Fund to downgrade its 2022 and 2023 global economic growth forecasts to 3.6%, according to a report Tuesday.

In its latest World Economic Outlook, updated following the annual spring meeting of the IMF and the World Bank, the IMF revised down growth forecasts for 143 countries accounting for 86% of global GDP.

In January, the IMF predicted a global economic growth rate of 4.4% and 3.8% in 2022 and 2023 respectively.

Russia’s invasion of Ukraine is the main driver of the stunted forecasts but other factors include historically high inflation in much of the world and continued citywide lockdowns in China.

“This crisis (the war) unfolds while the global economy was on a mending path but had not yet fully recovered from the Covid-19 pandemic, with a significant divergence between the economic recoveries of advanced economies and emerging market and developing ones,” the IMF said.

Russia, which is among the world’s 12 largest economies, is set for a 8.5% decline in GDP this year followed by a drop of 2.3% in 2023 as a result of its invasion of Ukraine and the Western sanctions slapped on Moscow in response.

Ukraine will suffer the worst economic consequences of the Russian invasion with a projected GDP contraction of 35% in 2022. The IMF warned that the economic fallout of the conflict could last for years in Ukraine, even if a resolution is swiftly secured.

The effects of the conflict are also being felt internationally in the rising prices of basic goods, given that both countries are major exporters of crops such as wheat and corn, while Russia also exports oil, natural gas and minerals. EFE


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