29 November 2022

Washington : IMF chief Kristalina Georgieva urged global policymakers Thurs day to take concerted action to avoid a ‘ dangerous new normal ” as the risks of a worldwide recession are driven ever higher by repeated economic shocks .

In a speech ahead of the fund’s annual meetings next week , the IMF’s managing director said it was critical to ‘ stabilize the global economy by addressing the most immediate challenges ‘ – including rampant inflation .

global recession risks rising
global recession risks rising

Policymakers need to act together to ” prevent this period of heightened fragility from becoming a dangerous ‘ new normal ‘ , ” Georgieva said .

But she warned the process will be painful — and that if central banks move too aggressively to tamp down price pressures , it could trigger a prolonged ‘ economic down turn .

Finance ministers and central bank governors from more than 180 nations will gather next week in Washing ton for the first fully in – person meeting of the International Monetary Fund and World bank since 2019. prior to the Covid – 19 pandemic .

Faced with the ” darkening global outlook … the risks of recession are rising . ” Georgieva said 12 announcing that the crisis lender plans to orice again downgrade its 2009 forecast for the world economy , in the forecasts due to published next week for the annual meeting .

One third of countries are expected to see at least two quarters of contraction , and ” even when growth is positive , it will feel like a recession ” because of rising prices eroding incomes , she said . The fund in July slashed its growth forecast for this year to 3.2 percent , and for next year to 2.9 percent – the third consecutive downgrade .

The meetings come at a difficult time for the global economy , with the pandemic largely under control , but soaring inflation and rising interest rates now threatening to reverberate around the globe and choke off nascent recoveries .

” In less than three years we lived through shock , after shock , after shock , ” Georgieva said . Global supply snarls already were a challenge as demand surged following the pandemic slowdown , fueling inflation worldwide , and strains worsened in the wake of the Russian invasion of Ukraine which Georgieva called a ‘ senseless war ‘ — sending food and food prices soaring .

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