Kristalina Georgieva (IMF) :Russian default no longer ‘improbable’, but no trigger for global financial crisis

Date:

- Advertisement -

Russia may default on its debts in the wake of unprecedented sanctions over its invasion of Ukraine, but that would not trigger a global financial crisis, International Monetary Fund Managing Director Kristalina Georgieva said on Sunday.

Georgieva told CBS’s “Face the Nation” program that sanctions imposed by the United States and other democracies were already having a “severe” impact on the Russian economy and would trigger a deep recession there this year.

The war and the sanctions would also have significant spillover effects on neighboring countries that depended on Russia energy supplies, and had already resulted in a wave of refugees compared to that seen during World War Two, she said.

Russia calls its actions in Ukraine a “special operation.”

The sanctions were also limiting Russia’s ability to access its resources and service its debts, which meant a default was no longer viewed as “improbable,” Georgieva said.

Asked if such a default could trigger a financial crisis around the world, she said, “For now, no.”

The total exposure of banks to Russia amounted to around $120 billion, an amount that while not insignificant, was “not systematically relevant,” she said.

Georgieva last week said the IMF would downgrade previous forecast for 4.4% global economic growth in 2022 as a result of the war, but said the overall trajectory remained positive.

Growth remained robust in countries like the United States that had been fast to recover from COVID-19 pandemic, she told CBS.

The impact would be most severe in terms of driving up commodity prices and inflation, potentially leading to hunger and food insecurity in parts of Africa, she said.

Latest

More like this
Related

Libya Bid Round 2025: A Major Opportunity for Oil and Gas Investors

Explore the Libya Bid Round 2025, a landmark opportunity for oil and gas investors. Discover key fiscal incentives, vast reserves, and strategic investment opportunities in Libya's energy sector.

IEG’s KEY CHOICE Returns to Rimini: Charting the future of corporate power purchase agreements

KEY CHOICE 2025: IEG event in Rimini drives corporate PPA growth. Learn how businesses can stabilize energy costs & boost sustainability. Insights on renewable energy trends.

Africa Banking Forum 2025: The Future of Digital Finance in Tunisia

Tunisian banks are urged to adopt the Pan-African Payment and Settlement System (PAPSS) to boost intra-African trade and digital transformation. Discover how the Africa Banking Forum 2025 emphasized the role of digitalization in financial resilience.

MIQYES Report: Profits, Challenges, and Growth Trends for Tunisian SMEs

Tunisian SMEs show resilience in 2023, with 64.1% reporting profits despite economic challenges. The MIQYES SME Health Barometer highlights investment trends, export constraints, financing difficulties, and job creation. Discover key insights into Tunisia's SME sector.

KEY – The Energy Transition Expo: A Global Hub for the Energy Transition Community

KEY - The Energy Transition Expo 2025 connects global leaders in Rimini. Explore the latest in decarbonization, green hydrogen, and renewable energy solutions.

IEG Forges Strategic Partnership to Expand Reach in Africa and the Middle East

IEG partners with Confindustria to promote Ecomondo & KEY energy expos in Africa & Middle East. Focus on green tech, circular economy, and sustainable development. #Ecomondo #EnergyTransition #Africa #MiddleEast

KEY – The Energy Transition Expo 2025: Leading the Way to a Decarbonized Future

KEY – The Energy Transition Expo 2025: Pioneering Decarbonization Solutions. Join global leaders, experts, and innovators at this pivotal event to shape the future of energy.

INNO’PRENEURS DAYS 2024: Catalyzing Ecological, Technological, and Entrepreneurial Transitions

Discover how the INNO'PRENEURS DAYS 2024 is driving ecological, technological, and entrepreneurial transitions. Join the conversation on sustainability, innovation, and social impact. Learn from experts, network with peers, and shape the future of business.