Commodity prices are being driven higher – IMF, World Bank lament impact of Russia-Ukraine conflict
The World Bank and the International Monetary Fund (IMF) have expressed shock about the ongoing geopolitical tension between Russia and Ukraine and the impact it is having on economies around the world.
A joint statement issued by the Bretton Woods Institutions on Tuesday March 1 said conflict is creating significant spillovers to other countries.
“Commodity prices are being driven higher and risk further fueling inflation, which hits the poor the hardest. Disruptions in financial markets will continue to worsen should the conflict persist,” part of the statement said.
Below is the full statement…
WASHINGTON, Mar. 1, 2022 – International Monetary Fund (IMF) Managing Director Kristalina Georgieva and World Bank Group President David Malpass today issued the following statement on the war in Ukraine.
“We are deeply shocked and saddened by the devastating human and economic toll brought by the war in Ukraine. People are being killed, injured, and forced to flee, and massive damage is caused to the country’s physical infrastructure. We stand with the Ukrainian people through these horrifying developments. The war is also creating significant spillovers to other countries. Commodity prices are being driven higher and risk further fueling inflation, which hits the poor the hardest. Disruptions in financial markets will continue to worsen should the conflict persist. The sanctions announced over the last few days will also have a significant economic impact. We are assessing the situation and discussing appropriate policy responses with our international partners.
“Our institutions are working together to support Ukraine on the financing and policy fronts and are urgently increasing that support. We have been in daily contact with the authorities on crisis measures. At the IMF, we are responding to Ukraine’s request for emergency financing through the Rapid Financing Instrument, which our Board could consider as early as next week. In addition, we continue to work on Ukraine’s Stand-By Arrangement program, under which an additional $2.2 billion is available between now and the end of June. At the World Bank Group, we are preparing a $3 billion package of support in the coming months, starting with a fast-disbursing budget support operation for at least $350 million that will be submitted to the Board for approval this week, followed by $200 million in fast-disbursing support for health and education. This package will include the mobilization of financing from several development partners, and we welcome the already-announced support from many bilateral partners.
“The World Bank and the IMF are also working together to assess the economic and financial impact of the conflict and refugees on other countries in the region and the world. We stand ready to provide enhanced policy, technical, and financial support to neighboring countries as needed. Coordinated international action will be crucial to mitigate risks and navigate the treacherous period ahead. This crisis affects the lives and livelihoods of people around the world, and we offer them our full support.”