The International Monetary Fund (IMF) stated on Saturday that it expects Ukraine to submit a request for emergency funding of $1.4 billion to its board for approval next week, and is in talks regarding financing options with the neighboring authorities in Moldova. The fund added in a statement that the war in Ukraine has already led to rising energy and grain prices, as well as a surge of over one million refugees into neighboring countries, while also causing unprecedented sanctions on Russia.
In a statement following a board meeting chaired by Managing Director Kristalina Georgieva, the IMF noted: "The situation remains highly volatile and forecasts are subject to extraordinarily high uncertainty, and the economic consequences are already extremely severe." It warned that "the ongoing war and the related sanctions will have a severe impact on the global economy," indicating that the crisis creates a negative shock to inflation and economic activity at a time when price pressures were already high, according to Reuters.
It stated that price shocks will be felt worldwide, and that authorities must provide financial support to poor households, for whom food and fuel constitute a higher share of their expenditures, adding that economic damage will increase if the war escalates. The comprehensive sanctions imposed by the United States, European countries, and others on Russia will also have a "significant impact on the global economy and financial markets, with considerable repercussions for other countries."
### Impact on Ukraine and Moldova
In addition to human losses, Ukraine has been suffering from significant economic damage, with seaports and airports closed and destroyed, and many roads and bridges devastated. The IMF noted: "While it is extremely difficult to accurately assess funding needs at this stage, it is already clear that Ukraine will face substantial recovery and reconstruction costs."
The board is expected to consider Ukraine's request for $1.4 billion in emergency funding early next week. Last week, the IMF stated that Ukraine also has $2.2 billion available until June under a standby arrangement. The fund revealed that Moldova and other countries with close economic ties to Ukraine and Russia are at "particular risk."
It explained that IMF experts are discussing financing options with Moldova, which has requested an increase and restructuring of its current $558 million IMF loan program to help cover the costs of the current crisis.
