Washington DC: IMF chief Kristalina Georgieva urged policymakers on Thursday, to work jointly to avoid a “dangerous new normal,” as the risks of a global recession are raised by repeated shocks to the global economy.
In a speech prior to the IMF annual meetings next week, she said that a series of economic shocks had released persistently high inflation, prompting a cost-of-living crisis in nations all across the world.
It is critical to “stabilize the global economy by addressing the most immediate challenges,” including fighting inflation, Georgieva said in her speech.
Warning that the IMF would issue downgrades to its growth forecasts for next year, Georgieva said, “We are experiencing a fundamental shift in the global economy.”
According to Georgieva, there have been numerous shocks since the start of the pandemic that have radically altered the economic picture, making inflation more persistent.
With high energy prices weighing on growth, Covid disruptions in China, slowing momentum in the US economy and higher interest rates from big central banks, she said the risks were mounting for economic activity around the world.
However, she also warned that the process would be difficult and that if central banks act quickly to reduce pricing pressures, it might result in a “prolonged” economic downturn.
Watch World Economic Forum President Børge Brende on global recession in conversation with News Mobile Editor-in-Chief Saurabh Shukla.
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