War in Russia ‘most important factor’ slowing growth, says IMF

Russia’s war in Ukraine is “the most important element” that is slowing economic growth and generating global instability, the chairman of a key IMF committee said on Friday.

Nadia Calvino’s remarks came as finance ministers and central bankers gathered in Washington for the IMF and World Bank’s annual meetings, which focused on war, soaring inflation and the climate crisis. .

There was a “very strong call” throughout the week for Russia to end its war on Ukraine, said Calvino, who is chairman of the International Monetary and Financial Committee and also Spain’s economy minister.

“War is the most important element that slows down growth and generates inflation, volatility, energy and food insecurity and uncertainty,” she told a conference. press, describing peace as a key economic policy tool.

But the committee, in which Russia is involved, failed to agree on a statement because Russia blocked a consensus, Calvino added.

Instead, she released a statement from the president acknowledging that the pandemic and war are “weighing heavily on economic activity” with a significant impact on livelihoods.

The statement also said that countries welcome voluntary contributions to facilitate financial assistance to Ukraine.

The Group of 20 major economies closed talks in Washington on Thursday without issuing a joint statement either, as in its last two meetings, with the group equally divided over the Russian invasion and as the US-Saudi feud escalates. was intensifying.

“Stop the war… Don’t you think this is an easier way to get the world economy back in better shape?” IMF chief Kristalina Georgieva asked at Friday’s press conference.

This week, the International Monetary Fund said more than a third of the global economy is heading for contraction this year or next, warning that the three largest economies will continue to stagnate.

The fund cut its forecast for global growth to 2.7% in 2023, and its chief economist Pierre-Olivier Gourinchas warned that next year will look like a recession for many people.

Throughout its meetings of financial chiefs this week, the crisis lender stressed that the priority was for central banks to continue to tighten monetary policy to control inflation, and for governments to keep their budgets tight.