IMF and World Bank warn of growing risk of recession

MADRID, 10 Oct. (EUROPA PRESS) -

The International Monetary Fund (IMF) and the World Bank coincide in pointing out the growing risk of recession in the world as a result of the impact of the current turmoil and the tightening of financing conditions due to rate hikes to tame high inflation.

"There is a real risk of recession next year," warned the American David Malpass, president of the World Bank, during a talk with the managing director of the IMF, the Bulgarian Kristalina Georgieva, who has agreed on the greater risk of recession. "I agree that the risk of a recession has increased," she said.

In this regard, the President of the World Bank highlighted the ongoing slowdown in advanced economies, as well as the impact on emerging and developing economies of the depreciation of currencies against the dollar, which has aggravated debt problems, for which the increases in interest rates imply "an additional burden".

For her part, Georgieva has warned that about a third of the world economy will suffer two consecutive quarters of contraction, which is defined as a technical recession.

In this way, IMF forecasts suggest that the loss of production in the world economy until 2026 will reach 4 trillion dollars (4 trillion euros), a figure equivalent to the GDP of Germany.

In this regard, Georgieva has pointed to the slowdown at the same time that is observed in the three key economies of the world: the eurozone, China and the United States.