The International Monetary Fund (IMF) and the World Bank have warned of the growing risk of a global recession as accelerating inflation forces central banks to raise interest rates, slowing growth.
Higher borrowing costs are “really starting to bite,” IMF Managing Director Kristalina Georgieva said alongside World Bank President David Malpass at a virtual event Monday that kicked off the annual meetings of its institutions.
According to the Bloomberg news agency, the IMF calculates that about a third of the world economy will have at least two consecutive quarters of contraction this year and next, and that the loss of production until 2026 will be US $ 4,000 million.
At the same time, policymakers cannot allow inflation to be a “runaway train,” Georgieva said.
For his part, Malpass warned that there is a “real danger” of a global contraction next year.
He also pointed out that the strength of the dollar is weakening the currencies of developing countries, increasing their debt to “burdensome” levels.
