Home PoliticsAmerica Russia Ukraine War and the Global Economy

Russia Ukraine War and the Global Economy

by S. Jack Heffernan Ph.D

The IMF warned on Saturday that the already “serious” global economic impacts of the war in Ukraine would be “all the more devastating” should the conflict escalate.

Even as forecasts remain subject to “extraordinary uncertainty, the economic consequences” of the invasion launched last week by Russia on its eastern European neighbor “are already very serious,” the IMF said in a statement.

A surge in energy and commodity prices, with a barrel of oil now close to $120, have piled on the inflationary hike that the world was already experiencing as economies recover from the Covid-19 pandemic.

“Should the conflict escalate, the economic damage would be all the more devastating,” the international lender said in a statement after a meeting Friday of its executive board on the economic impact of the war.

“Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses.”

In Ukraine, “the economic damage is already substantial,” with infrastructure shut down, damaged or destroyed, with the country due to “face significant recovery and reconstruction costs.”

The IMF said emergency financial assistance requested by Ukraine, already reported on February 25, amounted to $1.4 billion, adding the request could be brought before the executive board as early as next week, according to the statement.

“The sanctions on Russia will also have a substantial impact on the global economy and financial markets, with significant spillovers to other countries,” the IMF said.

It noted “a sharp mark-down in asset prices as well as the ruble exchange rate” already, with the full scope of the “unprecedented” sanctions’ impact too early to call.

It said scarcity and supply disruptions could be particularly sharp for countries with close economic ties with Ukraine and Russia.

Moldova, which borders Ukraine to the southwest, has already asked for “augmentation and rephasing of its existing IMF-supported program to help meet the costs of the current crisis” and authorities are in talks with the IMF.

On the tenth day since Russia’s invasion of Ukraine, Russian forces have escalated their bombardment in multiple regions of the country, including Mariupol, surrounded by Russian troops.

Nearly 1.4 million people have fled the war, according to the United Nations, including to neighboring Moldova.

You may also like

logo-white

Your Trusted Source for Capital Markets & Related News

© 2023 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.