Global financial bodies warn of war-driven threats to post-pandemic recovery

By Aysu Bicer

ANKARA (AA) - Russia's war on Ukraine will hamper the post-pandemic recovery around the world, and the collective response to this crisis is underway, said three global financial bodies in a joint statement late Thursday.

"We are horrified and deeply concerned about the Russian invasion of Ukraine and the ensuing crisis," the heads of the European Bank for Reconstruction and Development (EBRD), International Monetary Fund, and World Bank said in a statement after meeting to discuss the global economic impact of the Ukraine war.

"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," it said.

The financial institutions are expecting the entire global economy to feel the effects of the crisis through slower growth, trade disruptions, and steeper inflation, harming in particular the poorest and most vulnerable.

"Higher prices for commodities like food and energy will push inflation up further," they underlined. "Reduced confidence and higher investor uncertainty will impact asset prices, tighten financial conditions, and could even generate capital outflows from emerging markets."

The EBRD has approved €2 billion ($2.2 billion) in financing support to Ukraine in response to the immediate needs of the people affected by the war.

For its part, the IMF on March 9 disbursed emergency assistance totaling $1.4 billion to Ukraine under the Rapid Financing Instrument (RFI) to help meet urgent financing needs including mitigating the economic impact of the war.

The World Bank Group has also mobilized more than $925 million for Ukraine, including fast-disbursing budget support to help the government provide critical services to the Ukrainian people, of which $350 million has been disbursed.