Global financial institution heads predict consequences of Ukrainian crisis

The consequences of the current crisis in Ukraine will affect the entire global economy. Among other points, a slower growth and higher inflation are expected. In addition, disruptions in trade will be observed.

As reported by TASS, a joint statement – made by Managing Director of the International Monetary Fund Kristalina Georgieva, President of the World Bank David Malpass, President of the European Bank for Reconstruction and Development Odile Renaud-Basso, President of the European Investment Bank Werner Hoyer and Governor of the Council of Europe Development Bank Carlo Monticelli – reads, “The consequences will be large-scale – ranging from reduction in energy and food supplies to rising prices and poverty.” The document states that all these factors, in addition to the need to reconstruct Ukraine, ‘will hinder economic recovery in the world after the coronavirus pandemic’.

"The entire global economy will face the effects of the crisis due to a slower growth, disruptions in trade, and higher inflation. This will harm mostly the poorest and the most vulnerable. Higher prices for goods such as food and energy will lead to an even greater increase in inflation. The countries, especially those bordering Ukraine, will face disruptions in trade, supply chains, money transfers, and also an influx of refugees. Reduction in confidence and greater uncertainty for investors will affect the value of assets, lead to a tightening of financial conditions and may even provoke an outflow of capital from the rapidly developing markets," the statement reads.