IMF tallies economic toll from war in Ukraine

IMF tallies economic toll from war in Ukraine

Washington, 19 April (Argus) — Russia's invasion of Ukraine and the resulting humanitarian, economic and commodity supply crisis will lower global economic growth and set back recovery from the Covid-19 pandemic in most regions of the world, the IMF says.

The IMF's latest World Economic Outlook update released today downgrades the 2022 global economic growth forecast by 0.8 percentage points to 3.6pc. It forecasts 2023 growth at 3.6pc, another downgrade. That compares with 6.1pc recorded in 2021. The IMF forecast traditionally is used by many economists, including at the IEA, to model oil demand projections.

"Global economic prospects have been severely set back, largely because of Russia's invasion of Ukraine," IMF director of research Pierre-Olivier Gourinchas said today.

The notable exceptions to this trend are countries dependent on oil and other commodity exports. The IMF has raised its 2022 growth forecast for Saudi Arabia by 2.8 percentage points to 7.6pc.

Even before Russia's 24 February invasion of Ukraine added a tragic and far-reaching factor into its forecasts, IMF economists were sounding downbeat notes on the global economy. But the war and its spillover effect are going to worsen economic trends that worried the IMF since late last year, including inflation and supply chain disruptions.

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