IMF warns of possible bankruptcy of Russia
The agency, through its president, assured that the country is now at a high risk of going bankrupt
The International Monetary Fund (IMF) assured that the bankruptcy of Russia “is no longer an improbable event” as a result of the sanctions applied in recent weeks after the attacks against Ukraine.
“Russia’s default is no longer an unlikely event. It’s not that Russia doesn’t have money, but the applied sanctions make it impossible for Russia to use this money”, said Kristalina Georgieva, managing director of the IMF.
The economist also highlighted that currently the agency does not maintain pragmatic or political relations with the government of Vladimir Putin. In the same way, she assured that the office in Moscow is not currently available.
On the other hand, the director of the IMF warned that the implemented sanctions caused an abrupt contraction of the Russian economy, leading it to a “deep recession” in which the depreciation of the ruble drives up inflation and substantially reduces purchasing power and standard of living of the vast majority of the Russian population.
In this way, Georgieva said that the deep contraction of the Russian economy and the potential significant contagions to other neighboring economies will have a probable effect on the world economic outlook, which the IMF will update next month, when growth projections will be revised “down”.
The IMF is in discussions with Ukraine about what may be most needed as support to ensure that the functioning of the Ukrainian economy, the Central Bank, the Ministry of Finance and key authorities are better adapted to the circumstances of the current crisis.
K. Tovar
Source: Swissinfo
