The Managing Director of the International Monetary Fund, Kristalina Georgieva, has warned that the world is going to be a different place after the war in Ukraine. The conflict has displaced millions of people, but also the response in terms of sanctions has been unprecedented.
“First of all, there will be more impact on what the energy future looks like. How do we make sure there is energy security for our economies and our people. Second, how can we think about reserves and how do we think about securing one’s position. And Third, I am very concerned that we may see more friction in the world,” Georgieva said.
The IMF has provided more than €1.3 billion of emergency financing, but in the longer term Ukraine needs more practical help, to support reconstruction and avoid hyperinflation.
Yet inflation is global, fueled by both the pandemic and supply disruptions caused by war.
And it is having an impact on growth forecasts, as indicated by the head of the IMF: “We projected 4.9% in October. We recognized that we had to cut it. We went down to 4.6%. And now we have gone down even more, to 3.6%. So if you look at our growth projections against what we’ve achieved in 2021, 6.1% drops to 3.6% in an economy that hasn’t quite recovered yet.”
The director of the IMF clearly sees that the war is a great setback for the world.”