IMF: Global Recession Cannot Be Ruled Out
08-07-2022
By: Rohit Tripathi
IMF: Global Recession Cannot Be Ruled Out
IMF chief Kristalina Georgieva has issued a warning that the global economic outlook "has deteriorated markedly," highlighting the fact that a global recession "cannot be ruled out."
In an interview with sources on Wednesday, Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), talked about the outlook for the world economy and the possibility of a worldwide recession.
She identified a number of causes, including wider distribution of inflation, larger increases in interest rates, a slowdown in China's economic development, and escalating sanctions connected to the conflict between Russia and Ukraine.
In April, the IMF reduced its projection of global growth in 2021 from 6.1 percent to 3.6 percent in 2022 and 2023. The Fund observed that this was "0.8 and 0.2 percentage points lower for 2022 and 2023," in January projection.
Georgieva stated that the IMF will downgrade its projection for global growth once more in the latter part of this month, making it the third such reduction this year.
When questioned about the possibility of a global recession, the managing director of the IMF responded, "We cannot rule it out since the risk has increased."
Georgieva stated that the second quarter of recent economic statistics revealed that some significant economies, such as those of China and Russia, had declined. She expressed concern that the hazards will be substantially worse in 2023. She cites the urgent and pressing need to restore pricing stability as justification for her belief that slower economic development may be a "necessary price to pay."
She stated that in order for central banks and finance ministries to give help in a highly focused manner, "We must foster a strong level of collaboration between them and avoid interfering with monetary policy goals.”
In June, World Bank President David Malpass issued a warning about a potential global recession. He cautioned that many countries would find it challenging to recover from a recession, noting that "this is the worst downturn in 80 years."
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