World Bank President David Malpass and International Monetary Fund President Kristalina Georgieva reiterated their warnings that continuing interest rates increase the risk of global recession.
The IMF-World Bank Annual Meetings started in Washington, the capital of the USA.
In this context, World Bank President Malpass and IMF Director Georgieva “Dealing Multiple Crises in an Age of Instability” He made evaluations about the world economy in the session titled.
“Next year the world is at risk of recession”
malpass, “There is a risk and real danger of a recession for the world next year.” said. Pointing out that some developed economies in Europe are slowing down, Malpass said that it will be seen where this situation will lead next year.
Malpass stated that the depreciation of currencies in many developing countries means that debt levels for countries become more and more burdensome, and that the increase in interest rates aggravates this.
Malpass emphasized that inflation is still a big problem for everyone but especially the poor.
“We see a very important problem that is dragging down growth in China”
According to the news of AA; IMF Managing Director Kristalina Georgieva said she agrees with Malpass that the risk of recession has increased.
Recalling that they calculate that approximately one third of the world economy will show negative growth for at least two consecutive quarters this year or next year, Georgieva stated that they expect the slowdown in the world economy to cause a loss of approximately 4 trillion dollars by 2026.
Eurozone, China and US economy slowing down
Pointing out that they have seen a slowdown in all three key economies of the world, Georgieva explained that these economies are the Euro Zone, China and the USA.
Stating that this situation is due to natural gas prices in the Euro Zone, Georgieva stated that disruptions related to the Kovid-19 outbreak and volatility in the housing sector were effective in China. Georgieva, “We see a very significant problem in China that is dragging down growth.” said.
IMF Director Georgieva stated that although there is still a very strong labor market in the USA, economic growth has lost momentum due to rising interest rates.
“The danger of a debt crisis is huge and scary”
The danger of a debt crisis “big and scary” Stressing that developed economies should take this danger under control, Georgieva stated that this will not only affect countries with high debt burden, but all countries.
“If we act together, we can reduce the pain”
Georgieva, “If we join forces, if we act together, we can reduce the pain we face in 2023.” he said.
Touching on the risks of climate change, Georgieva emphasized that the world needs 3 to 6 trillion dollars to address these risks and that cooperation with the private sector is important.