IMF: The Russian war against Ukraine was a turning point for the global economy.

The Russian aggression has had severe consequences for the global economy, and has become a turning point for the world’s future, said the deputy head of the IMF, Gita Gopinath. The war has increased fragmentary pressures and led to an increase in defense spending while countries have also worked to implement measures to strengthen their economic and national security.

Gopinath explains that such measures now help countries adapt to the new reality of conflicts. However, over the decades, these measures “will make the global economy more vulnerable to shocks, with higher inflationary pressures, lower potential output growth, and instability in public finances.”

The economic damage Ukraine has suffered is enormous: production volume has become 25% lower than the pre-war level, and a significant part of the capital has been destroyed. At the same time, the Russian war created consequences on a global scale, primarily for Central, Eastern, and Southeastern Europe. Inflation has affected countries dependent on Russian gas and grain exports from Ukraine. The war also affected economic growth in the region and forced countries to increase defense spending.