WASHINGTON, April 19 — The “seismic” impact of the war in Ukraine is spreading worldwide, causing the IMF today to sharply downgrade its 2022 global growth forecast to 3.6 per cent.
“The economic effects of the war are spreading far and wide — like seismic waves that emanate from the epicentre of an earthquake,” IMF chief economist Pierre-Olivier Gourinchas said in the report. European nations will see much slower growth as the war drives up fuel and food prices, pushing inflation higher around the world and keeping it high for longer than expected.
Meanwhile, the pandemic is continuing, and lockdowns in China to defeat renewed coronavirus outbreaks are slowing activity, including in manufacturing hubs, which “could cause new bottlenecks in global supply chains.” Rising prices were a concern even before the conflict and now shortages caused by the war “will greatly amplify those pressures, notably through increases in the price of energy, metals and food,” Gourinchas said.
Gourinchas added his voice to the call to help countries restructure their debt by improving the G20 Common Framework adopted last year, which was meant to offer a path to restructure large debt loads.
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