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The International Monetary Fund (IMF) managing director Kristalina Georgieva has warned of rising recession risks as the lender downgrades its growth forecast for next year and expects a global output loss of about $4 trillion between now and 2026.
Persecondnews.com reports that the threat of a global recession is growing as central banks focus on bringing down soaring inflation rates by aggressively hiking interest rates.
The Central Bank of Nigeria during its last MPC meeting had increased the interest rate from 11.5% to 14%.
“In less than three years we lived through shock, after shock, after shock,” Kristalina Georgieva said in a speech at Georgetown University in Washington on Thursday, ahead of the IMF-World Bank annual meetings in the US capital this month.
Ms Georgieva cited the Covid-19 pandemic, Russia’s war in Ukraine and climate disasters that have exacerbated inflationary pressures and led to food and energy prices soaring, causing a cost-of-living crisis.
“Most economists, including at the IMF, thought the recovery would continue, and inflation would quickly subside — largely because we expected vaccines would help tame supply side disruptions and allow production to rebound,” Ms Georgieva said.
“But this is not what happened. Multiple shocks, among them a senseless war, changed the economic picture completely. Far from being transitory, inflation has become more persistent.”
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