Russia's war with Ukraine and the resultant sanctions imposed on Russia will have a "severe impact" on the global economy, warned the International Monetary Fund (IMF).
The global lender, in a statement on Saturday, noted that the ongoing crisis "was creating an adverse shock to inflation and economic activity at a time when price pressures were already high."
IMF, in a statement on Saturday, said it expected to bring Ukraine's appeal for $1.4 billion in emergency financing to its board for approval "as early as next week" and was holding talks about funding options with authorities in neighbouring Moldova.
Also Read: Russia-Ukraine war's impact on global economy: What's at stake?
"While the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious," the Washington-based lender said in its statement after a board meeting chaired by Managing Director Kristalina Georgieva.
IMF stated that Russia's war in Ukraine was already triggering grain and energy prices on an upward spiral, and had sent a wave of over one million refugees to neighbouring nations while sparking unprecedented sanctions on Russia.
"Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses," noted the lender, adding that authorities should give fiscal support to poor households for whom food and fuel made up a higher proportion of expenses.
IMF further noted that the economic damage would increase if the war between the two countries (Russia and Ukraine) escalated.
The global lender said the sweeping sanctions imposed on Russia by the US, European nations and other countries would also have a "substantial impact on the global economy and financial markets, with significant spillovers to other countries."
Also Read: The Economic Impact of the Russia-Ukraine Conflict
IMF stated that central banks will need to "carefully monitor or the pass-through of rising international prices to domestic inflation, to calibrate appropriate responses."
It noted that governments across the world will need to identify ways to support the most vulnerable households and help offset increasing living costs.
"This crisis will create complex policy tradeoffs, further complicating the policy landscape as the world economy recovers from the pandemic crisis," IMF said.
Ukraine, it added, will face "significant recovery and reconstruction costs," mentioning that "substantial" economic harm had already been done by the war.