IMF: Ukranian war to impact global economy, increase inflation
The International Monetary Fund (IMF) has warned that the war in Ukraine will have a major impact on the global economy, increasing inflation and hurting growth.
The IMF disclosed this via twitter in a recent video:
The war in Ukraine will have a major impact on the global economy, increasing inflation and hurting growth. Learn more about how war affects the global economy in our latest Analyze This! video. https://t.co/yaiJHqv3Gq pic.twitter.com/cm2QdBnyFU
— IMF (@IMFNews) March 19, 2022
“Our world is more interconnected than ever. So when conflicts happen, they affect the economies of many other countries.
“Usually neighbouring countries suffer the most. They are the most impacted by geopolitical tensions and refugee flows, which can put a major strain on resources.
“But countries with strong trade links can also be severely impacted.
“A contraction in commodity trade would not only raise prices of commodities, but it can put a dent on consumer confidence and purchasing power.
“High inflation diminishes real incomes and suppresses demand for goods and services, eating into consumer spending. When this happens, financial conditions could tighten as central banks raise interest rates.
“And if confidence is hit hard, demand could significantly decrease.
“…It will weigh on economic growth and distresses on public finances and potentially even add to risks of social unrest, especially on countries dependent on food and energy imports.
“Longer term this could have implications on the global supply chain system and integrated financial markets.
“While the future is still very uncertain, we may see significant changes in the global economic order as the energy trade flows shift, payment systems fragment and countries rethink their financial dependence on each other,” said the IMF.
Amaka E. Nliam/ IMF
