The International Monetary Fund (IMF) maintained its global economic growth forecast for 2023 at 3%, the estimate for 2024 was reduced by 0.1 percentage points – to 2.9%, noted the growing risks of dividing the world economy into blocs and called Russia’s cessation of the war against Ukraine the most effective measure to improve global prospects.

"The ongoing separation of the world economy into blocs amid Russia’s war in Ukraine and other geopolitical tensions could intensify — with more restrictions on trade (in particular, trade in strategic goods, such as critical minerals), cross-border movements of capital, technology, and workers, and international payments. Should this happen, the costs for global prosperity will be high," the IMF said in its WEO: Navigating Global Divergences macro forecast.

In a review of the potential impact of bloc divisions on global trade in commodities, the fund described a scenario that assumes two theoretical blocs would be created based on the 2022 UN vote on Russia's war on Ukraine.

"The bloc including the countries that voted for Russia’s withdrawal from Ukraine in the 2022 UN vote is labeled the US-Europe+ bloc, and the remaining countries are included in the China-Russia+ bloc," the report says.

"Food prices remain elevated and could be disrupted further by an escalation of the war in Ukraine, causing important hardship for many low-income countries. This, of course, represents a serious risk to the disinflation strategy," the fund said.

"The suspension in July of the Black Sea Grain Initiative and recent attacks on Ukraine’s grain facilities are concerns in this regard. In this context, a proliferation of export restrictions on agricultural products aimed at reducing domestic prices complicates the delivery of commodities to global markets, with the potential to exacerbate fluctuations in commodity prices," according to the document.