The head of the International Monetary Fund warned Thursday that Russia's war against Ukraine was weakening the economic prospects for most of the world's countries and called high inflation “a clear and present danger'' to the global economy.
IMF Managing Director Kristalina Georgieva said the consequences of Russia's invasion was contributing to economic downgrades for 186 countries, although most of them will continue to grow. The war has disrupted global trade in energy and grain and is threatening to cause food shortages in Africa and Middle East.
Georgieva made her comments in remarks prepared for a speech on the eve of next week's spring meetings of the IMF and the World Bank in Washington.
An unexpectedly strong recovery from 2020's pandemic recession has caught businesses by surprise, leaving factories, ports and freight yards unable to keep up with strong customer demand and pushing prices higher. Inflation, which is forcing the world's central banks to raise interest rates, amounts to “a massive setback for the global recovery,'' Georgieva said.
Georgieva also warned of “the fragmentation of the world economy into geopolitical blocs," with the West imposing far-reaching sanctions on Russia and China expressing support for the autocratic Russian regime of President Vladimir Putin.
“In a world where war in Europe creates hunger in Africa; where a pandemic can circle the globe in days and reverberate for years; where emissions anywhere mean rising sea levels almost everywhere — the threat to our collective prosperity from a breakdown in global cooperation cannot be overstated,” Georgieva said.