Financial sanctions will push Russia into ‘deep recession’, shift global economic order: IMF official

A senior International Monetary Fund official said “unprecedented” sanctions against Russia would push the country into a deep recession, while the impact of the conflict with Ukraine would have a profound negative effect on the broader global economy.

Gita Gopinath, senior deputy managing director of international financial institutions, said in an interview that aired Sunday on Rosemary Barton Live The world will continue to face rising commodity prices, disruptions in Eastern European countries and depressed consumer and investor economic confidence.

“The scale at which we see this happening is very, very large. I think this has implications for the global economic order as we know it,” Gopinath told CBC’s chief political correspondent Rosemary Barton.

“We also see that the next set of sanctions will remove Russia from the World Trade Organization. So this is a big change happening… And the longer it lasts, the more likely we are to see it. major changes in the global order,” he said.

The IMF this week approved $1.4 billion in emergency financing to Ukraine, which Gopinath said would help the embattled country overcome an acute shortage of basic goods and infrastructure due to the ongoing war started by Russia.

But Gopinath told Barton there is not much the IMF can do to punish Russia directly given they have no active program in the country.

He said he wouldn’t speculate about possibly booting Russia from the IMF, but said, “We’ve seen the unthinkable happen in terms of war in Europe, so at this point, I’m not going to speculate, but things are moving. so fast and so fast that a lot of things are possible.”

WATCH | IMF officials discussed the impact of the Ukraine conflict on the global economy:

International Monetary Fund officials discuss the economic impact of Russia’s invasion of Ukraine

Gita Gopinath, the International Monetary Fund’s first deputy managing director, spoke to CBC’s chief political correspondent Rosemary Barton about the economic consequences of Russia’s invasion of Ukraine. The IMF approved US$1.4 billion in emergency funding for Ukraine. 8:19

Canada has moved with other North American and European countries to impose significant sanctions on Russian entities, including severing several banks from the SWIFT financial communications system. Prime Minister Justin Trudeau said the sanctions were aimed at Putin and “the co-architects of this barbaric war” while Foreign Minister Mélanie Joly said the sanctions were aimed at “strangling” the Putin regime.

Among those recently sanctioned by Canada is Russian billionaire Roman Abramovich, who is the largest shareholder in steel company Evraz, which operates in western Canada. Treasury Secretary Chrystia Freeland warned early in the conflict that international sanctions could have an impact on Canada, but Trudeau downplayed those fears this week.

“Sanctions against Russian officials and oligarchs like Abramovich are directed at them so they cannot profit or benefit from economic activity in Canada – or the hard work of Canadians working in the companies they invest in,” Trudeau said while in Poland at a news conference. . tour to visit European allies.

Ukraine has repeatedly requested additional assistance from western countries, which have responded with economic measures as well as material military assistance, but are not directly involved in the conflict.

Ukrainian President Volodymyr Zelensky will address the House of Commons this Tuesday.

You can watch the full episode of Rosemary Barton Live on CBC Gem, CBC streaming streaming service.

Clara Burton

"Geek zombie. Subtly charming social media scholar. Beer enthusiast. Lifelong bacon pioneer."

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