IMF Managing Director: "Russian Default Possible" ... Draws Line on Global Financial Crisis

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), stated on the 13th (local time) that there is a possibility of Russia defaulting on its debt due to the impact of Western sanctions imposed on Russia for invading Ukraine. However, she drew a line on the possibility of this triggering a global financial crisis.

In an interview with CBS in the United States on the same day, Managing Director Georgieva said, "I no longer think that a Russian debt default is an improbable event." She assessed, "Russia has paid its debts, but it cannot access those funds." She also indicated that "what concerns me are the consequences beyond Ukraine and Russia," suggesting that the invasion of Ukraine could have a significant impact on the global economy.

Managing Director Georgieva diagnosed that the sanctions imposed by the West, including the United States, on Russia are already having a severe impact on the Russian economy. She also predicted, "The Russian economy will experience a severe recession this year." She mentioned that this war could cause food and energy prices to surge, fueling inflation in major countries, tightening government finances, and even leading to famine in Africa and other regions.

However, Managing Director Georgieva drew a line when asked whether Russia would trigger a new global financial crisis, saying, "Not at this time."

She evaluated, "The global banks' exposure to Russia is $120 billion," adding, "It is not insignificant, but it is not a systematically connected risk." Earlier, she announced that she would revise downward the 2022 global economic growth forecast, which was previously expected at 4.4%, reflecting the impact of Russia's invasion of Ukraine and other factors.

This content was produced with the assistance of AI translation services.