Conflict escalation between Russia and Ukraine exacerbates inflation: IMF


The intensification of the conflict between Russia and Ukraine could help raise energy and commodity prices and further prolong current inflation, said a senior executive at the International Monetary Fund (IMF).

Gita Gopinato, the first Deputy Managing Director of the IMF, said: January 25 press conference During the announcement of the latest global economic outlook for government agencies. The report predicts that inflation will last longer than previously expected IMFs, even without the additional impact of the boiling conflict between Russia and Ukraine.

When asked how the IMF would take into account escalation-related turmoil in inflation forecasts, Gopinus said the potential impact would be higher oil and gas prices and energy costs to rise more broadly. Stated.

“When it comes to headline inflation, this certainly has the potential to keep headline inflation longer,” Gopinus said. “Of course, as with all international communities, we want a peaceful solution to this problem.”

Western leaders are increasingly worried about Russian troops rallying near the Ukrainian border, fearing that Moscow may be planning an invasion. Although the Kremlin has denied such plans, the history of Russia’s regional warfare, including the 2008 invasion of Georgia and the 2014 invasion of the Crimean Peninsula, is deeply skeptical of the Western countries’ guarantee of Moscow.

Meanwhile, inflation is skyrocketing around the world, and economists are blaming factors such as pandemic supply chains and labor disruptions. Historically unprecedented levels of fiscal and monetary stimulus have pushed demand and prices in the face of supply constraints, along with the savings accumulated during the pandemic.

The surge in inflation has surprised many policy makers. They have increasingly abandoned the “temporary” story that pervaded the official statement from the central bank, which is now in the midst of hawkish pivots, to curb runaway prices.

The IMF warned in the global economic outlook that the surge in Omicron expects the global economy to enter 2022 in a weaker position than previously expected and that inflation will continue to rise longer. In 2022. “

And while risks to the global economy are declining, according to the IMF, there is a high level of uncertainty about future inflation paths in the face of supply chain disruptions, rising energy prices and upward wage pressure. There is sex.

Tom Ojimek

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Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communication, and adult education. The best writing advice he has ever heard is from Roy Peter Clarke.