The World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment.
Kristalina Georgieva, the chief of the International Monetary Fund (IMF) made these grim assertions on Sunday during a CBS news programme "Face the Nation."
IMF Chief underscored that the relentless war and the emergence of the new COVID wave in China are affecting the economy.
The paper from the Brookings Institution by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund (IMF) found that "this unemployment path returns inflation to near the Fed's target only under optimistic assumptions".
The European Central Bank has already hiked the interest rates in a bid to tame inflation and plans to continue doing so as the situation further deteriorates.
The president’s statement appeared to be about inflation rising worldwide, not necessarily whether countries had higher rates than the U.S. Annual inflation in Japan, for example, has risen in recent months though it’s still at a yearly rate of 2.4%, according to the Organization for Economic Co-operation and Development.
For now, most economists don't foresee a downturn in the near future. Despite the inflation squeeze, consumers — the primary driver of the economy — are still spending at a healthy pace. Businesses are investing in equipment and software, reflecting a positive outlook. And the job market is still booming, with hiring strong, layoffs low and many employers eager for more workers.
Kristalina Georgieva reminded that the International Monetary Fund is forecasting 3.6% growth for 2022, which is “a long way to global recession.”
For the 12 months ending in January, inflation amounted to 7.5% — the fastest year-over-year pace since 1982 — the Labor Department said Thursday. Even if you toss out volatile food and energy prices, so-called core inflation jumped 6% over the past year. That was also the sharpest such jump in four decades.
As per reports, Treasury Secretary Janet Yellen believes the economy may fall into a recession if Congress fails to address the borrowing limit before an unprecedented default on the U.S. debt.
IMF MD Georgieva said this is adding to exceptional and coordinated actions taken over the past year.
The National Statistical Office (NSO) data on Friday showed that the Q2FY21 GDP on a year-on-year basis contracted by 7.3 per cent from (-)24.4 per cent in the preceding quarter.
The GDP at constant (2011-12) prices in Q2 of 2020-21 is estimated at Rs 33.14 lakh crore.
India has technically entered into a recession with a likely contraction in its GDP during the July-September period, according to a report by the Reserve Bank of India (RBI).
The world is experiencing one of the deepest recessions since the Great Depression in the 1930s owing to the novel coronavirus, World Bank President David Malpass has said, terming the COVID-19 pandemic a "catastrophic event" for many developing and the poorest countries.
The U.K. economy has officially fallen into a recession after official figures showed it contracting by a record 20.4% in the second quarter as a result of lockdown measures put in place to counter the coronavirus pandemic.
The global economy, which has plunged into a severe contraction, will shrink by 5.2 per cent this year due to the massive shock of the coronavirus pandemic and the shutdown measures to contain it, the World Bank said on Monday.
The Indian economy is likely to slip into recession in the third quarter of this fiscal as loss in income and jobs and cautiousness among consumers will delay recovery in consumer demand even after the pandemic, says a report. According to Dun & Bradstreet's latest Economic Observer, the country's economic recovery will depend on the efficacy and duration of implementation of the government's stimulus package.
The UK faces a "significant recession", Chancellor of the Exchequer Rishi Sunak has warned after figures showed the country's economy shrank by 2 per cent in the first three months of the year due to the impact of the coronavirus-induced economic lockdown.
The U.S. unemployment rate hit 14.7% in April, a level last seen during the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record — stark evidence of how the coronavirus has brought the economy to its knees.
Top News
Latest News
