Ukraine contributes only a quarter of a percent to global economic output. Furthermore, the exposure of European banks to Ukraine is relatively small. According to data from the Bank for International Settlements it stands at about $ billion. A known obstacle that could block our way, on the other hand, is the prolonged period of very low interest rates.
Unwinding the extraordinary measures was one of the messages highlighted during the IMF-Word Bank Spring Meetings held last April. Balancing the need to safeguard economic recovery and controlling inflation would be a key challenge for policymakers going forward. The balancing act requires a well-planned, well-calibrated, and well-communicated exit strategy to avoid causing substantial market volatility, reduce potential spillovers, and continue the recovery momentum.