The International Monetary Fund (IMF) on Saturday disclosed that countries that are economically linked with Ukraine and Russia are prone to experience scarcity and supply disruptions.
The financial institution made the disclosure in a press statement, which was titled ‘IMF Staff Statement on the Economic Impact of War in Ukraine’.
As the Ukraine-Russia war persists, price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses, IMF added.
The Washington-based fund further expressed dissatisfaction towards the tragic loss of life, human suffering, and the ongoing massive damage to Ukraine’s physical infrastructure, adding that over a million refugees were in neighbouring countries.
The statement further revealed that, while the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious. It added that Energy and commodity prices—including wheat and other grains—have surged, adding to inflationary pressures from supply chain disruptions and the rebound from the Covid 19 pandemic.
The Fund, however, said that the sanctions on Russia would substantially impact the global economy and financial markets, with significant spillovers to other countries.
Meanwhile, Ukraine has requested emergency financing of $1.4bn under the IMF’s Rapid Financing Instrument to help in cushioning the economic effects of the war.