The International Monetary Fund on Tuesday issued a warning over a possible global recession as “the slowdown of the global economy has intensified.”
The organization also on Tuesday released its latest reports on the world economy and global financial stability. The IMF said economic pressures have worsened in recent months, citing mounting inflation, COVID shutdowns in China and the persisting effects of Russia’s invasion of Ukraine as the main reasons why.
Amid record inflation, central banks across the world have raised interest rates. Meanwhile, supply chain issues, the continued impact of COVID and Russia’s invasion of Ukraine have compounded rocky economic conditions.
While Europe has been amid a natural gas and energy crisis, China has seen ripples in the housing market and the resurgence of COVID shutdowns. Meanwhile, the U.S. has seen oil prices rise again in recent weeks after a 99-day decline.
“Global financial stability risks have increased with a balance of risk that is skewed to the downside. Markets have been extremely volatile,” Tobias Adrian, director of monetary and capital departments at the IMF said in a press conference Tuesday.
Adrian added that global market conditions have significantly worsened in emerging economies.
“20 countries are either in default or trading at stress levels,” he said.
He added that, according to the IMF’s global stress tests for banks, 29% of emerging market banks could breach minimum capital requirements.
The IMF on Tuesday said the overall economic picture looks bleak, with global growth projected to fall from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023.
“In short, the worst is yet to come, and for many people 2023 will feel like a recession,” the IMF said in its report.
The IMF and World Bank are holding their annual meeting this week, with top economic advisors and officials from around the world set to attend.