The global economy is facing “its biggest test since the Second World War”, the managing director of the International Monetary Fund said at the start of the World Economic Forum in Davos.
Kristalina Georgieva said the conflict in Ukraine has “compounded the Covid-19 pandemic – a crisis upon a crisis – devastating lives, dragging down growth, and pushing up inflation.”
“Add to this sharply increased volatility in financial markets and the continuing threat of climate change, and we face a potential confluence of calamities,” she warned.
The IMF chief highlighted the impact of soaring food and energy prices on households worldwide, saying the crisis is creating huge problems for “highly-indebted vulnerable countries” which will need debt restructuring.
Georgieva urged rich countries to lower trade barriers, help nations in debt distress, and improve cross-border payment systems.
The IMF warning comes amid fears of a global recession, with Chinese production falling sharply due to lingering coronavirus restrictions. At the same time, Europe and the US are grappling with a cost of living crisis, and emerging markets are facing food shortages as a result of sanctions against Russia, a major commodities supplier.