Euro zone growth is set to slow
The European Union, highly dependent on Russian energy, should be the most impacted area from the war with a growth drop from 3.9% to 2.8%. IMF also indicated that a further tightening of Western sanctions on Russia to target energy exports would cause another major drop in global output.
Commodity exporting countries, excluding Russia, already benefit from the surge in energy and food prices, rising inflation in advanced economies and emerging markets – +5.7% and +8.7% respectively, the most since 1984.
Austerity looms large
Since the conflict has broken out and inevitably reversed our recent progress, national and international action needs to be taken to prevent any further deterioration and improve economic prospects.
According to IMF Managing Director Kristalina Georgieva, “The war may get worse. The sanctions may tighten up. COVID may roam again around the world […] For policymakers — a tough time.”
Not to mention the latest lockdowns in China that are likely to cause new bottlenecks in global supply chains.
