War reduces energy and food supplies, causes prices to rise and increases poverty.
Major international economic organizations, including the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development, have warned of the "widespread" consequences of the Russian attack on Ukraine on the global economy.
In a joint statement, the organizations expressed their "dread and grave concern" about the war in Ukraine, explaining that they met on Thursday to discuss its impact and the collective response to it.
The signatory institutions, including the European Investment Bank, also stated that "to the devastating humanitarian catastrophe in Ukraine, the war is disrupting livelihoods in the region and beyond".
She explained that the war limits energy and food supplies, causes prices to rise and increases poverty, which "will harm the post-pandemic economic recovery in the world".
"The global economy as a whole will feel the consequences through slower growth and disruption in trade, and the poorest and most vulnerable will be hit the hardest," the statement said.
The institutions pointed out that Ukraine's neighboring countries will suffer in particular from the disruption of trade and supply chains, and will face "refugee waves".
The damage will also affect financial markets, as the uncertainty of the outlook will reflect on asset prices, cause tightening financial conditions, and may even lead to an “outflow of capital out of emerging markets”.
Reminding the institutions of the measures taken so far, they enumerated an aid package of 2 billion euros from the European Bank for Reconstruction and Development covering in particular energy and nuclear security, 668 million euros from the European Investment Bank, 1.4 billion dollars in emergency assistance from the International Monetary Fund, and 925 million dollars from the World Bank.
The institutions considered that the countries neighboring Ukraine would face severe repercussions in the face of a large influx of people fleeing the war.
"Countries, especially Ukraine's neighbors, will suffer disruptions in trade, supply chains and remittances, as well as an increase in the flow of refugees," she added.
"We understand the importance of working together to coordinate our own responses to support Ukraine and its neighbors on the financial and political fronts and to maximize impact on the ground," the institutions added.
She noted that she is "committed to strengthening international cooperation and solidarity in the face of this great challenge".
The Source
- afp.com