Russia to experience 'deep recession' amid sanctions, says IMF chief

INA-  sources

The International Monetary Fund said Sunday that it expects Moscow to experience a "deep recession" as sanctions applied against Russia over its invasion of Ukraine have already had a severe effect upon its population and economy.


Kristalina Georgieva, the IMF's managing director, told CBS' Face the Nation on Sunday that the sanctions have already caused Russia's economy to contract, shrinking the public's incomes and spending power along with the depreciation of the ruble, the currency of Russia.

"We expect a deep recession in Russia," she said, adding, "In terms of servicing debt obligations, I can say that no longer we think of Russian default as improbable event. Russia has the money to service its debt, but cannot access it."

Russia invaded Ukraine Feb. 24, and in response democratic nations, including the United States, Canada, the 27-member European Union and several others imposed wide-reaching sanctions against Russian banks, oligarchs and entities while several Westerner businesses have also announced full pull-outs of the nation or suspensions of operations, dealing a heavy blow to Moscow's economy.




Asked if the situation could spark an international financial crisis, Georgieva said not for now but the exposure of about $120 billion in Russian banks will result in the IMF downgrading growth rate projections for the year though she expects them to still be positive.


The worry right now for the IMF lies with countries neighboring Russia and Ukraine, she said, due to their economic ties with the warring nations and their accepting of the brunt of nearly 2.7 million Ukrainian refugees who have fled the war.

The two other groups of countries the IMF are concerned with are those that have yet to recover from the COVID-19 pandemic and those, including the United States, that rely on Russia to meet their energy needs.

"War in Ukraine means hunger in Africa, but war in Ukraine also has social implications for many, many countries," she said.

The IMF last week disbursed $1.4 billion to Ukraine in an effort to mitigate some of the effects of the war, and she remarked that the Kyiv authorities "have been remarkable," considering the situation.

"We had negotiations on this $1.4 billion and my staff tells me they can hear the air raid sirens, and yet works go on," she said.