The International Monetary Fund joined a growing chorus that’s warning of a risk that Russia will default on its debt obligations as the nation suffers a deep recession caused by sanctions.
A Russian default is no longer “an improbable event,” IMF Managing Director Kristalina Georgieva said adding that unprecedented sanctions against the nation will make it difficult for the country to convert its IMF reserve assets, known as special drawing rights, into currency.
Russia is moving into a “deep recession,” with the ruble’s plunge driving up inflation and severely denting the purchasing power of the Russian population, Georgieva said.
The IMF is likely to cut its projection for global growth for this year when it presents the next update to its World Economic Outlook ahead of the lender’s spring meetings next month, Georgieva said. The fund had already cut its projection for 2022 to 4.4% in January as the Covid-19 pandemic enters its third year, citing weaker prospects for the U.S. and China along with persistent inflation.
