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IMF chief: War in Ukraine and inflation threaten global economy

WASHINGTON (AP) — The head of the International Monetary Fund warned Thursday that Russia’s war on Ukraine is weakening the economic outlook for most countries around the world and called high inflation a “clear and present danger” for the world economy.

IMF Managing Director Kristalina Georgieva said the consequences of the Russian invasion are contributing to the economic downgrade of 143 countries, although most of them will continue to grow. The war has disrupted global energy and grain trade and threatens to cause food shortages in Africa and the Middle East.

Georgieva made her comments in remarks prepared for a speech on the eve of next week’s spring meetings of the IMF and World Bank in Washington.

A surprisingly strong recovery from the 2020 pandemic recession took businesses by surprise, leaving factories, ports and freight stations unable to meet strong customer demand and pushing prices higher. Inflation, which is forcing the world’s central banks to raise interest rates, amounts to “a massive setback for the global recovery”, Georgieva said.

Georgieva also warned of “the fragmentation of the global economy into geopolitical blocs”, with the West imposing far-reaching sanctions on Russia and China expressing support for the Russian autocratic regime of President Vladimir Putin.

“In a world where war in Europe creates hunger in Africa; where a pandemic can circle the globe in days and reverberate for years; where emissions everywhere means rising sea levels almost everywhere – the threat to our collective prosperity from a breakdown in global cooperation cannot be overstated,” Georgieva said.

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This story has been corrected to show that the IMF expects the war in Ukraine to contribute to lower economic growth for 143 countries, not 186.

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