Recession approaching: IMF and World Bank with bleak outlook

Created: 10/10/2022 4:37 p.m

Euro: The World Bank and the IMF are warning of a global economic downturn.

© Arne Dedert/dpa

The World Bank and the International Monetary Fund are warning of a global recession.

Economic growth is already slowing down in Europe.

Washington - The International Monetary Fund (IMF) and the World Bank have warned of the risk of a global recession.

Economic growth is slowing down in some industrialized countries in Europe, said World Bank boss David Malpass on Monday at the start of the annual meeting of the World Bank and International Monetary Fund in the US capital Washington.

Currency devaluation is a problem for low-income countries, where the debt burden is growing.

"The rise in interest rates is an additional burden and inflation remains a major problem for everyone, but especially for the poor," Malpass said.

IMF boss Kristalina Georgieva made a similar statement.

"We're seeing a slowdown in all three of the world's major economies," she said.

In the eurozone, rising energy prices are a particular problem.

In China, the corona pandemic is still causing disruptions in supply chains, which is slowing down growth.

In the USA there is still a strong labor market - but it is slowly losing momentum due to the strict interest rate policy of the US Federal Reserve.

The IMF presented its new forecast for the further development of the global economy on Tuesday.

Georgieva had already announced that the growth forecast would be lowered again.

Corona, war and climate: crises put a strain on the economy

“In the past three years we have witnessed unimaginable events that have had significant consequences.

Covid is still with us, Russia's invasion of Ukraine has dramatic consequences everywhere," Georgieva said.

According to the head of the IMF, climate catastrophes on all continents have also put people in difficult situations.

It is the first time since 2019 that the annual conference in autumn will take place entirely on site again.

Because of the corona pandemic, the meeting last took place in a hybrid format, i.e. partly with meetings at the headquarters of the organizations in Washington and partly online.

The conference brings together finance ministers, representatives of the financial sector and development cooperation, and central bankers.