top of page

World Bank warns of rising global recession risk amid simultaneous rate hikes

As central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023, the World Bank warned Thursday.


World Bank warns of rising global recession risk amid simultaneous rate hikes
World Bank headquarters in Washington, D.C., the United States.(Xinhua/Liu Jie)

Central banks around the world have been raising interest rates this year with a degree of synchronicity not seen over the past five decades - a trend that is likely to continue well into next year, the World Bank said in a new study.



Yet the currently expected trajectory of interest rate increases and other policy actions may not be sufficient to bring global inflation back down to levels seen before the pandemic, the study noted.


Investors expect central banks to raise global monetary policy rates to almost 4 percent through 2023 - an increase of more than 2 percentage points over their 2021 average, according to the study.


"If this were accompanied by financial-market stress, global GDP (gross domestic product) growth would slow to 0.5 percent in 2023 - a 0.4 percent contraction in per-capita terms that would meet the technical definition of a global recession," the study noted.



Ayhan Kose, the World Bank's acting vice president for Equitable Growth, Finance, and Institutions, noted that because the rate hikes are highly synchronous across countries, they could be "mutually compounding" in tightening financial conditions and steepening the global growth slowdown.


"Policymakers in emerging market and developing economies need to stand ready to manage the potential spillovers from globally synchronous tightening of policies," said Kose.


A string of financial crises in emerging market and developing economies that would do them lasting harm, according to the study.



"My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies," said World Bank President David Malpass.


"To achieve low inflation rates, currency stability and faster growth, policymakers could shift their focus from reducing consumption to boosting production," said Malpass.


"Policies should seek to generate additional investment and improve productivity and capital allocation, which are critical for growth and poverty reduction," Malpass added.


Source: Xinhua, Editor: Huaxia

Read more from the TAGS & Links-

9 views0 comments

Comments


Planner 5D- Interior design app

Planner 5D- Interior design app

Flipkart Online Shopping App

Flipkart Online Shopping App

World population to reach 8 billion this year, as the growth rate slows

July 12, 2022 at 6:57:56 AM

15 November 2022 is predicted to be the day that the global population reaches eight billion. The projection is revealed in the UN’s World Population Prospects 2022 report, which also shows that India is on course to surpass China as the world’s most populous country in 2023.

World population to reach 8 billion this year, as the growth rate slows

WHO: Nearly one billion people have a mental disorder

June 22, 2022 at 7:20:50 AM

Nearly one billion people worldwide suffer from some form of mental disorder, according to the latest UN data – a staggering figure that is even more worrying if you consider that it includes around one in seven teenagers.

WHO: Nearly one billion people have a mental disorder

What can the UN do? Check the top 5 questions answered

April 6, 2022 at 10:51:48 AM

The current war in Ukraine, following the Russian invasion, has sparked all sorts of questions about the United Nations, particularly the role of the Security Council, the General Assembly and the Secretary-General.

What can the UN do? Check the top 5 questions answered

Ukraine: UN’s Guterres joins call for Bucha war crimes probe

April 6, 2022 at 8:22:29 AM

UN chief António Guterres on Tuesday added his voice to the growing international calls for a war crimes investigation into the killing of civilians in the Ukrainian town of Bucha.

Ukraine: UN’s Guterres joins call for Bucha war crimes probe

Recent terrorist attacks in Israel undermine ‘prospects for peace’: Guterres

March 31, 2022 at 8:29:57 AM

Secretary-General António Guterres on Tuesday night condemned recent terrorist attacks in Israel that have claimed the lives of at least 11 Israeli citizens.

Recent terrorist attacks in Israel undermine ‘prospects for peace’: Guterres

China's BYD ceases to produce gasoline-powered vehicles

4/4/22, 7:00 AM

Chinese auto manufacturer BYD announced Sunday that it has already ceased the production of traditional gasoline-powered vehicles starting from March.

China's BYD ceases to produce gasoline-powered vehicles

Performance-oriented all-new ŠKODA SLAVIA 1.5 TSI Launched creates a segment of its own

3/27/22, 10:42 AM

All new ŠKODA SLAVIA 1.5 TSI starts at ₹ 16.19 lacs

Performance-oriented all-new ŠKODA SLAVIA 1.5 TSI Launched creates a segment of its own

CARS24 Raises $450 Million, Nearly Doubles Its Valuation To $1.84 Billion

9/25/21, 6:16 AM

CARS24, India’s leading e-commerce platform for pre-owned vehicles, announced today the closing of a $450M round of funding including a $340M Series F equity round alongside $110M debt from diversified financial institutions.

CARS24 Raises $450 Million, Nearly Doubles Its Valuation To $1.84 Billion

Tata Motors launches the ‘XPRES’ brand for fleet customers

7/18/21, 6:13 PM

Tata Motors, one of India’s leading automobile manufacturers, today announced the launch of a new brand ‘XPRES,’ exclusively for fleet customers.

Tata Motors launches the ‘XPRES’ brand for fleet customers

Audi India announces curated ownership plans for Audi e-tron and Audi e-tron Sportback customers

7/18/21, 5:56 PM

Special Service Plans, Extended Warranty and Buyback for a hassle-free ownership experience

Audi India announces curated ownership plans for Audi e-tron and Audi e-tron Sportback customers

TikTok hits 1 billion global active users

9/28/21, 8:56 AM

TikTok mission is to inspire creativity and bring joy.

TikTok hits 1 billion global active users

FACT CHECK: Crypto is increasingly being used for criminal activity and is a haven for illicit finance

6/23/21, 6:11 AM

Because cryptocurrency is still new, we are often asked about the biggest myths surrounding it. It’s common for a new market or product to confuse people until they get familiar with it. Think about Airbnb: the idea of staying in a stranger’s home seemed crazy until it didn’t.

FACT CHECK: Crypto is increasingly being used for criminal activity and is a haven for illicit finance

PUBG: NEW STATE surpasses 17 Million Google play store PRE-REGISTRATIONS following its recent ALPHA TEST

6/19/21, 4:40 AM

KRAFTON, Inc. to open pre-registration for the game on Apple’s App Store in Q3 2021

PUBG: NEW STATE surpasses 17 Million Google play store PRE-REGISTRATIONS following its recent ALPHA TEST
bottom of page