Ukraine: IMF, World Bank, top lenders see widespread economic fallout
The Ukraine crisis has sent oil prices rocketing close to record levels of close to $140 per barrel, while other commodities have hit historic highs on supply fears.
LONDON: The International Monetary Fund, World Bank and other top global lenders warned Friday of "extensive" economic fallout from Russia's invasion of Ukraine and expressed horror at the "devastating human catastrophe".
"The entire global economy will feel the effects of the crisis through slower growth, trade disruptions, and steeper inflation, harming especially the poorest and most vulnerable," they said in a joint statement, warning that the conflict was increasing poverty.
"Higher prices for commodities like food and energy will push inflation up further."
The Ukraine crisis has sent oil prices rocketing close to record levels of close to $140 per barrel, while other commodities including aluminium, coal, copper, natural gas, nickel, tin, wheat and zinc have hit historic highs on supply fears.
The statement was issued a day after a meeting to discuss the global impacts of the Ukraine war -- and their individual and collective responses to the escalating crisis.
Other signatories included the Council of Europe Development Bank, the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).
"We are horrified and deeply concerned about the Russian invasion of Ukraine and the ensuing crisis," the lenders said.
Attacks on civilians and their infrastructure were "causing tremendous suffering, creating massive population displacements, threatening international peace and security, and endangering basic social and economic needs for people around the world.
"In addition to the devastating human catastrophe unfolding in Ukraine, the war is disrupting livelihoods throughout the region and beyond," the statement said.
The UN says more than three million people have fled Ukraine since Russia launched its assault on February 24, with more than two million crossing into EU member Poland.
The finance bodies also warned that the fast-moving crisis would hobble the world economy's recovery from coronavirus.
"The impacts will be extensive -- from reduced energy and food supplies, to increases in prices and poverty and a massive undertaking of Ukraine's reconstruction, all of which will hamper the post-pandemic recovery around the world," they said.
Ukraine's neighbours would face harsh fallout especially from vast numbers of migrants fleeing to safety.
"Countries, particularly those neighbouring Ukraine, will suffer disruptions in trade, supply chains and remittances as well as surges in refugee flows," the banks said.
Investor uncertainty would dent asset prices, tighten financial conditions and likely spark capital outflows from emerging markets.
"Our institutions have responded with emergency support to Ukraine and its neighbours," the statement said.
The lenders have handed out billions in emergency assistance for war-torn Ukraine: the EBRD has pledged 2.0 billion euros ($2.2 billion), the EIB 668 million euros, the IMF has already given $1.4 billion to Ukraine, while the World Bank mobilised more than $925 million.
"We acknowledge the importance of working together to coordinate our respective responses to support Ukraine and neighbours on the financing and policy fronts and maximise impact on the ground," the lenders said.
"We are committed to strengthening international cooperation and solidarity in the face of this enormous challenge."