IMF Warns of World Economy Fragmentation Due to War


The war in Ukraine could lead to a global fragmentation that could wipe out decades of integration and the building of economic ties. The International Monetary Fund (IMF) warns against this, which also speaks of a world that is becoming poorer and more dangerous.


The fragmentation could affect anyone from the factory worker to the highest-paid professionals.

According to IMF chief Kristalina Georgieva, countries must lower their trade barriers to ensure that there are no shortages of important raw materials. It would also help curb inflation. Especially now that dozens of countries have restricted the trade in food, energy and other important raw materials, according to the Bulgarian.

Georgieva shared her insights in a blog post ahead of the World Economic Forum in Davos, Switzerland, being held this week. She co-wrote the post with Gita Gopinath, the fund’s deputy director, and Ceyla Pazarbasioglu, the head of the strategy, policy and evaluation department.

According to the drafters, countries should see if they can diversify their supply chain to safeguard it and contain production losses. The G20, the group of largest economies, should also work on debt restructuring, it says.

Furthermore, policymakers argue that cross-border payment systems need to be modernised. Countries should work together to create a public digital platform for handling money transfers. That would help reduce costs and improve safety. Countries should also work together to tackle climate change.

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