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The International Monetary Fund (IMF) is warning that the world must brace for a significant economic slowdown, explosive inflation, and potential violent societal unrest due to skyrocketing energy and food prices as famine and depression loom in the wake of the Russian invasion of Ukraine.
The IMF is predicting that Ukraine’s economy will catastrophically contract by more than a third which is unprecedented in modern times, according to Sky News. “BREAKING: The world must brace itself for an economic slowdown, a burst in inflation and a potential wave of social unrest as energy and food prices rise to intolerable levels, the IMF has warned,” the news outlet tweeted.
The Russian economy is expected to be hit by the biggest recession it has seen since the fall of the Soviet Union. It will contract by 8.5 percent this year as sanctions from the U.S. and Europe bite.
But it’s not just those two countries that are being impacted. The IMF is saying that almost all countries will contract due to the war, potentially leading to worldwide devastation. It emphasized that the global economic outlook has “worsened significantly” since January.
BREAKING: The world must brace itself for an economic slowdown, a burst in inflation and a potential wave of social unrest as energy and food prices rise to intolerable levels, the IMF has warned.@EdConwaySky analyses the latest World Economic Outlook.https://t.co/E8ESLWuBjA pic.twitter.com/RpBpICRxxa
— Sky News (@SkyNews) April 19, 2022
“The economic effects of the war are spreading far and wide – like seismic waves that emanate from the epicenter of an earthquake,” Pierre-Olivier Gourinchas, who is the IMF’s recently-appointed chief economist stated.
“In the matter of a few weeks, the world has yet again experienced a major, transformative shock. Just as a durable recovery from the pandemic-induced global economic collapse appeared in sight, the war has created the very real prospect that a large part of the recent gains will be erased,” he pointed out.
“The long list of challenges calls for commensurate and concerted policy actions at the national and multilateral levels to prevent even worse outcomes and improve economic prospects for all,” Gourinchas put forth, seemingly suggesting a radical solution like The Great Reset.
All part of the plan…. But we were called conspiracy theorists! 😂😂😂
— ArsenalPC (@Arsenalfanblog) April 20, 2022
— Chris Lorimer (@lorimerDevon) April 19, 2022
Russia is a major provider of oil and metals to the world, and Russia and Ukraine together are suppliers of wheat and corn which have sharply risen in price, further highlighting the specter of hunger on the global stage.
Projections of global growth were slashed for 2022 and 2023 by the IMF from 4.4 percent to 3.6 percent, which is a sharp deceleration from growth of 6.1 percent in 2021, according to CNN Business.
The forecast for inflation spreading and exploding across the globe is also deeply worrisome. The IMF now says that inflation will increase in most economies. It expects that the consumer price index will average 7.7 percent in the US in 2022 which may be overly optimistic as many experts contend it will rise much more than that. Inflation in the U.S. and U.K. are at multi-decade highs currently.
“There is a rising risk that inflation expectations become de-anchored, prompting a more aggressive tightening response from central banks,” the IMF warned.
Front and center as the IMF gather in DC this spring is the possibility of social unrest in many countries, including the United States, due to the high prices of food and energy as people find they can no longer feed their families or afford to drive to work.
“The war in Ukraine has increased the probability of wider social tensions in the near term through two main channels,” the IMF asserted.
Ukraine asks the IMF for $5 billion a month for the "functioning of the economy" in the next quarter, said the head of the fund
— Levi (@Levi_godman) April 20, 2022
“The first is a further sharp rise in global fuel and food prices-a particular concern in emerging market and developing economies with limited fiscal space that are highly dependent on energy and food imports for basic consumption. This could intensify commodity hoarding, export controls, and domestic restrictions-with further knock-on effects on supply disruptions, prices, and social unrest,” the fund predicted.
“The second is the longer-term impact of the humanitarian crisis,” the IMF head added, stating that “large refugee inflows may exacerbate preexisting social tensions and fuel unrest,” according to Politico.
According to CNN Business, Goldman Sachs put the likelihood of a U.S. recession at 15% in the next 12 months and 35% within the next 24 months.
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