The International Monetary Fund (IMF) is closely engaged with Ukraine on how to apply the best crisis management measures to prevent its economic collapse, Managing Director Kristalina Georgieva said Tuesday.
"I would say that money is important, but support in how to keep the financial system functioning is equally important," Georgieva said in a live discussion held by US news publication Foreign Policy.
"The devastation of the Ukrainian economy breaks my heart. We are likely to see shrinkage that could be a third of what it was before the war. Imagine how that translates into hardship on people," she said.
Georgieva noted that the IMF immediately responded to a request by Ukraine for $1.4 billion in emergency funding to keep the country functioning and support vulnerable people and the administration in securing water and electricity in war-affected areas.
The IMF chief said Russia's war on Ukraine came at a time when the world economy was yet to recover from the coronavirus pandemic-induced crisis.
"What we were striving for is for (global economic) growth to go up and inflation, which has become a problem, to go down. Instead, we have the exact opposite. Growth is going down, inflation is going up," she said.
"We are assessing the impact of the war and the sanctions in different parts of the world in different categories of countries," she added.
Georgieva said the first category of countries consists of immediate neighbors of Russia and Ukraine, which have relatively weak economies that rely on trade.
Second are countries that receive refugees, which climbed to 3.3 million people, she noted. The third are countries that depend on imports of energy and food from Russia and Ukraine.
"Higher energy and higher food prices mean devastation. We encourage countries to direct the little policy space they have to those that are most vulnerable," she added.
