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The International Monetary Fund (IMF) has stated that the conflict in Ukraine has clouded the global economic picture and may result in recession in more susceptible countries.
Kristalina Georgieva anticipated a difficult year in 2022 and did not rule out a worldwide recession if things deteriorated significantly.
“Not at this time,” Georgieva said during a discussion on the international economy at the World Economic Forum’s annual conference in Davos, Switzerland. It doesn’t rule out the possibility.”
The IMF managing director stated that her organization had lately reduced the growth forecasts of 143 of its member countries, which account for 80% of global output.
“Since then, the horizon has clouded,” she said, noting that the impact of the Ukrainian conflict has been magnified by tightening financial conditions, a rising US dollar, and a recession in China. “2022 will be a difficult year.”
The IMF chief, like other Davos attendees, underscored the dangers of rising food costs. According to Georgieva, there has been a sense in the last week that the global economy is entering tougher waters. Although the price of oil had dropped, “food prices continue to rise, up, up, up.”
“When growth slows down, we can reduce our consumption of petrol,” she remarked, “but we still have to eat every day.” The global anxiety about affordable food is at an all-time high.”
The IMF now forecasts global growth of 3.6 percent this year, and Georgieva believes it is still far from negative. “We may witness recession in some countries that were already weak.” They have yet to recuperate from the Covid disaster. They rely heavily on Russian energy and food imports, and their environment is already weakened.”
Jane Fraser, the CEO of Citigroup, told the same Davos panel that Europe appeared to be particularly susceptible. “Europe is in the midst of a maelstrom caused by supply chains, the energy problem, and clearly the proximity to some of the atrocities taking on in Ukraine,” she said.