The International Monetary Fund said on Saturday that the economic consequences of the war in Ukraine were “already very serious”.
“The price shocks will have an impact around the world,” the body said in a statement. “Especially for poor households for whom food and fuel represent a higher proportion of expenditure.”
The global lender issued the warning after holding a board meeting chaired by chief executive Kristalina Georgieva.
The Russian invasion of Ukraine which began on February 24 entered its eleventh day on Sunday. Putin described the invasion as a “special military operation” aimed at dislodging “neo-Nazis” from power in Ukraine.
The invasion has so far resulted in the deaths of at least 351 civilians and more than 6,000,000 have fled Ukraine, according to the United Nations human rights office. On the Russian side, more than 498 of its soldiers died, according to the country’s military.
Several countries, including the United States and the European Union, have imposed tough sanctions on Moscow, leading to record crude oil prices and fears of supply chain disruptions.
On Saturday, the International Monetary Fund said sanctions against Russia will have a substantial impact on the global economy and financial markets, with significant spillovers to other countries.
“In many countries, the crisis is creating a negative shock to both inflation and activity, amid already high price pressures,” the body said. “Monetary authorities will need to carefully monitor the pass-through of higher international prices to domestic inflation, in order to calibrate appropriate responses.”
The global lender also said it would discuss Ukraine’s request for $1.4 billion in emergency funding with its board for approval as early as next week and was in talks on funding options. with the authorities of neighboring Moldova.
Ukrainian authorities had requested emergency financing from the International Monetary Fund on February 25, a day after Russia invaded the country.