Russia, which faces heavy sanctions after invading Ukraine, is expected to drop 8.5%.
According to the International Monetary Fund (IMF), the war in Ukraine could push other European countries into recession this year. Ukraine will be the hardest hit, with economic output likely to fall by 35 percent, according to the IMF’s European outlook on Friday. Russia, which faces heavy sanctions after invading Ukraine, is expected to drop 8.5%.
According to the IMF, many major economic nations such as Germany, France, Italy and Britain will shrink for two consecutive quarters this year or at least largely stagnate. Two negative quarters in a row are considered a recession.
Cut growth forecasts
Overall, the IMF lowered its growth estimates for established economic powerhouses by one point to three percent. Emerging European countries – although without Russia and Ukraine – are likely to grow by just 2.7 percent this year. The most recent estimate for January was thus reduced by 1.5 points.
Inflation, on the other hand, is becoming a much bigger problem than previously thought. Here, the IMF expects 5.5% in large countries and up to 9.3% in emerging countries. Previous estimates were thus increased by 2.2 and 3.5 percentage points, respectively. “We are at the beginning of a new era of high inflation,” France’s finance minister told TV broadcaster BFM on Friday. According to the IMF, monetary policy may have to take more decisive measures if the risks are confirmed.
(APA)