The International Monetary Fund on Tuesday warned of a possible global recession as “the slowdown in the global economy has accelerated”.
The organization also released its latest reports on the world economy and global financial stability on Tuesday. The IMF said economic pressures have worsened in recent months, citing rising inflation, COVID shutdowns in China and the ongoing impact of Russia’s invasion of Ukraine as the main reasons.
Amid record inflation, central banks around the world have been raising interest rates. Meanwhile, supply chain issues, the ongoing impact of COVID and Russia’s invasion of Ukraine have exacerbated difficult economic conditions.
While Europe is in the midst of a natural gas and energy crisis, China has seen ripples in the housing market and resurgences in COVID shutdowns. Meanwhile, US oil prices have rebounded in recent weeks after a 99-day decline.
“Risks to global financial stability have increased, with the risk balance pointing to the downside. Markets have been extremely volatile,” Tobias Adrian, director of the IMF’s currency and capital departments, said at a news conference on Tuesday.
Adrian added that global market conditions in emerging markets have deteriorated significantly.
“20 countries are either in default or trading under stress,” he said.
He added that according to the IMF’s global bank stress tests, 29% of banks in emerging markets could breach minimum capital requirements.
The IMF said on Tuesday the overall economic picture looks bleak as global growth is expected to slow to 3.6 percent in 2022 and 2023 from an estimated 6.1 percent in 2021.
“In short, the worst is yet to come, and for many people 2023 will feel like a recession,” the IMF said in its report.
The IMF and World Bank are holding their annual meeting this week, which will be attended by senior economic advisers and officials from around the world.
https://www.ibtimes.com.au/imf-sounds-warning-over-world-economy-global-recession-1839412?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution IMF warns of world economy, global recession