IMF, WB warn of ‘real danger’ of global contraction

The International Monetary Fund (IMF) and the World Bank (WB) have warned of the rising risk of a global recession. Faster inflation forces central banks to raise interest rates and pressures growth. IMF Managing Director Kristalina Georgieva said that higher borrowing costs are “really starting to bite”. The IMF estimated that about one-third of the world economy will have at least two consecutive quarters of contraction this year and next, and that the lost output through 2026 will be USD4tr. At the same time, Georgieva said that policymakers can’t let inflation be a “runaway train.” WB President David Malpass also warned that there’s a real danger of a worldwide contraction next year, and that dollar strength is weakening the currencies of developing nations, increasing their debt to burdensome levels.