Russia's war in Ukraine is the biggest culprit pulling the global economy into a downturn, IMF chief says

Russia's war in Ukraine has been the main drag on economic growth this year, IMF director Kristalina Georgieva said.

Liu Jie/Xinhua/Getty

• The Ukraine war is the "single most important negative factor" for the global economy, the IMF's head said.
• Russia's war is likely to continue to drag down growth next year, Kristalina Georgieva told CNBC.
• The world faces a downturn that could wipe $4 trillion off economic output within a few years.

Russia's invasion of Ukraine has had an outsized negative impact on the global economy this year – and will likely continue dragging down growth in 2023, the head of the International Monetary Fund has warned.

"We judge the war in Ukraine to be the single most important negative factor for the world economy this year, most likely also next year," Kristalina Georgieva told CNBC on Wednesday.

"Anything that creates more anxiety is, of course, damaging for the prospects for growth and for meeting the needs and aspirations of people everywhere," the IMF's managing director added.

The Ukraine war has disrupted the global economy by driving up the cost of food and energy, leading to a significant run-up in inflation.

That in turn has weighed on economic growth by forcing central banks like the US Federal Reserve to hike interest rates aggressively, in a bid to tame soaring prices.

The IMF said in October that war in Ukraine will likely continue hammering the world economy next year, predicting that global growth will fall from 3.2% in 2022 to 2.7% in 2023.

"This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic," it said.

Georgieva was speaking to CNBC from Bali, Indonesia, which is currently hosting a meeting of the G20 group of nations.

Leaders of the group of nations issued a joint declaration Wednesday, slamming Russia's ongoing invasion and urging it to end the war.

"It is the first time since February this year where there is a joint declaration coming from a committee of that nature," Georgieva said. "I want to congratulate Indonesia for chairing so well, in this very difficult moment."

This isn't the first time the IMF chief has warned about a global recession happening in 2023.

In October, she said that the coming downturn is likely to be worse than expected, and could wipe around $4 trillion off the world's economic output by 2026.

Read more: The looming global recession will mean falling income, rising prices, and job losses even worse than expected, IMF director says

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