Just ahead of the much-awaited meeting of G20 ministers and central bank governors amid worsening economic situation driven by the prolonged Russia-Ukraine war, Kristalina Georgieva, the top boss of International Monetary Fund has warned that 2022 will be a tough year and possibly the next year will be even tougher. Europe’s economic crisis is worsening as it stares at acute energy shortage and could even slip into a recession.

“As G20 ministers and central bank governors gather in Bali this week, they face a global economic outlook that has darkened significantly,” she wrote in a blog.

Not only have the smaller economies in Europe been hit hard but even the hitherto resilient and “strong” economies are now bracing for difficult times.

She pointed out that inflation is higher than expected and has broadened beyond food and energy prices. “This has prompted major central banks to announce further monetary tightening—which is necessary but will weigh on the recovery,’ she said.

The multilateral agency is also set to downgrade the global growth projections.

The annual inflation of living in the Euro area touched a record 8.6 per cent in June, up from 8.1 per cent in May.

To add to that problem, farmers in several European countries have now launched massive protests as countries push for organic farming and support the ‘Farm to Fork’ strategy.

Clearly, the sanctions on Russia have almost crippled European economy adding more uncertainty to global recovery.   

Also read: Euro, the EU currency is likely to keep losing sheen amid Ukraine war