The IMF is concerned Post-war situations will be challenging for the Global economy

From Inflationary pressures to supply chain disruptions and price shocks, the international financial institutions predict for all. 

• On 24th February, Russia broke out military invasion on Ukraine, which turned out to be a full-fledged war
• The ongoing war has already damaged enough both the countries on economic and humanitarian fronts
• Almost thirteen days since the war began and still has no sign of stopping anytime soon

A common understanding is that any emergency like pandemic or war creates panic in a chaotic situation globally. Most of the time, out of some badly affected regions, there are markets and economies worldwide. The world has already faced the worst hit of a global pandemic in the form of Covid-19, after which economies were trying their best to rebound. But another worse came out in the form of the Russia-Ukraine war. 

The ongoing war between two European countries could result in another global crisis. Many analysts and economists have been concerned that the effect of war may not be limited to the related countries, not even Europe but would hit the economy at a global level. 

A Saturday report consisted of the IMF’s statements regarding concerns about the ongoing war between Russia and Ukraine. The statement was issued after the executive board meeting held on 4th March. As per reports, the session was led by the President of the IMF, Kristalina Georgieva. Thoughts shared by the International Monetary Fund didn’t seem great; that was pretty obvious in such situations, and financial institutions also noted the boom of energy and commodities last week. 

The IMF is concerned about the upcoming pressure due to the rise in inflation caused by disturbed supply chains. There will impact economies across the world due to Price shocks. Poor households will be affected the most as more of their expenses go into food and fuel. IMF is further concerned that these situations will add up and toughen the revival of economies due to Covid-19 effects. 

According to the report, the IMF explained issues related to war, such as economic fallout, may not be limited to only a handful of countries. Still, possibilities are that it could reach across many of them. As the war gets longer, the damage to the economy will grow larger to the same extent. On top of that, the sanctions being laden on Russia might seem punitive actions for the country but, in the long term, could also show backfire effects.

As Russia itself is one of the established and top economies globally, putting sanctions and banning imports and exports from such countries may not be beneficial for other western and European countries.