The International Monetary Fund has warned of a global economic crisis over the Russian invasion of Ukraine, saying that postponing decades of integration would make the world poorer and more dangerous.Nations should reduce barriers to trade in order to reduce shortages and lower prices, after more than 30 countries set limits on trade in food, energy and other basic necessities, said IMF Executive Director Kristalina Georgieva.
Georgieva made the remarks on her blog with Gita Gopinath, deputy fundraiser, and CheylaPazarbasioglu, head of the department of strategy, policy and review, ahead of the World Economic Forum in Davos, Switzerland this week.Countries should separate imports to protect chains and reduce output losses due to disruptions, they said. The 20 largest economic group must also develop its own debt management framework to help deal with risk, officials say.
“The cost of continuing to disperse will be huge across the country,” they said. “And people at all levels of income will be affected – from low-paid professionals and low-wage factory workers to foreign workers, to low-wage workers who rely on imported food to survive. Many people will embark on a journey that will take them to other destinations. ” Bloomberg Economics last week released the simulation results of what a rapid transformation of global trade might look like in the long run. It points to a very poor and less productive planet, with trade going back to the levels before China joined the World Trade Organization. Also: inflation is likely to increase and become more volatile.
Border payment systems should be modernized, countries working together to create a digital public platform for managing outflows to reduce costs and improve security, writes IMF officials. And nations must work together to tackle climate change, they say.
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