Russia’s invasion of Ukraine has rocked markets and triggered nations to impose retaliatory measures that would hurt the global economic system, however, no economic crisis has materialized, the IMF said Tuesday.
In its present-day Global Financial Stability Report, the Washington-primarily based crisis lender said Moscow’s assault on its neighbor is “no longer a globally systemic event from an economic point of view,” but nevertheless distressing as international locations get over the pandemic amid high inflation.
“Despite the anticipated economic impact, especially in the war region and Europe, no global systemic event affecting financial institutions or markets has materialized so far,” the IMF said.
However, the report warns that “financial stability risks have risen on several fronts,” the report warns.
Those risks “may test the resilience of global financial markets amid huge uncertainties, especially should stress interact with preexisting vulnerabilities.”
Prices for crude oil and other commodities have surged globally since the invasion began in late February, while Western sanctions against Moscow have increased the risk of a Russian debt default, which could have aftershocks that spread beyond its financial system.
The IMF said “the war has crystallized specific amplification channels of the shock that operate through financial markets,” such as causing volatility in commodities prices.
The conflict could shock commodity prices and push inflation higher, or prompt cyberattacks that hit the global financial system.
These could negatively impact the shift to inexperienced strength international, the IMF said, noting that “better commodity prices and supply disruptions will in all likelihood make the transition toward power renewables greater highly-priced and complex.”
Beyond the effect of the warfare, the report pointed to China, pronouncing a current sell-off in shares blended with a debt crisis inside the actual estate area and rise in Covid-19 cases “has raised issues approximately a growth slowdown, with possible spillovers to rising markets.”
