The Russia-Ukraine war is expected to have a severe economic impact on the European economy, according to the International Monetary Fund (IMF).
In a report titled “Regional Economic Outlook for Europe,” IMF said that the “large increases in commodity prices and compounded supply-side disruptions will further fuel inflation and cut into households’ incomes and firms’ profits.”
“Inflation is projected to hit a multi-decade high in many countries. And new risks loom from escalating fighting and disruptions to critical energy flows,” it added.
Additionally, the IMF noted that the main challenges right now in the region include caring for refugees, helping households and companies cope with higher energy spending, and improving energy security for each nation.
“The war and its aftermath will also add to the structural challenges facing post-pandemic Europe. In Ukraine, social and economic infrastructure destroyed by the war will need to be rebuilt, which will require large financing flows from donors,” it added.