"We can\u2019t rule out a possible global recession

" \n We can\u2019t rule out a possible global recession - IMF says \n \n\n \n The managing director of the International Monetary Fund (IMF),\u00a0Kristalina Georgieva\u00a0has said the outlook for the global economy had \u201cdarkened significantly\u201d since April and she could not rule out a possible global recession next year given the elevated risks. \n \n\n \n Georgieva told Reuters the fund would downgrade in coming weeks its 2022 forecast for 3.6% global economic growth for the third time this year, adding that IMF economists were still finalizing the new numbers. \n \n\n \n The\u00a0IMF\u00a0is expected to release its updated forecast for 2022 and 2023 in late July, after slashing its forecast by nearly a full percentage point in April. The global economy expanded by 6.1% in 2021. \n \n\n \n \u201cThe outlook since our last update in April has darkened significantly,\u201d she told Reuters in an interview, citing a more universal spread of inflation, more substantial interest rate hikes, a slowdown in China\u2019s economic growth, and escalating sanctions related to Russia\u2019s war in Ukraine. \n \n\n \n \u201cWe are in very choppy waters,\u201d she said. Asked if she could rule out a global recession, she said, \u201cThe risk has gone up so we cannot rule it out.\u201d \n \n\n \n Recent economic data showed some large economies, including those of China and Russia, had contracted in the second quarters, she said, noting the risks were even higher in 2023. \n \n\n \n \u201cIt\u2019s going to be a tough \u201922, but maybe even a tougher 2023,\u201d she said. \u201cRecession risks increased in 2023.\u201d \n \n\n \n Investors are growing increasingly concerned about recession risks, with a key part of the U.S. Treasury yield curve inverted for a second straight day on Wednesday, in what has been a reliable indicator that a recession is looming. \n \n\n \n Federal Reserve Chair Jerome Powell last month said the U.S. central bank was not trying to engineer a recession, but was fully committed to bringing prices under control even if doing so risked an economic downturn. \n \n\n \n Georgieva said a longer-lasting tightening of financial conditions would complicate the global economic outlook, but added it was crucial to get surging prices under control. \n \n\n \n The global outlook was more heterogeneous now than just two years ago, with energy exporters, including the United States, on a better footing, while importers were struggling, she said. \n \n\n \n Slower economic growth may be a \u201cnecessary price to pay\u201d given the urgent and pressing need to restore price stability, she said. \n \n\n \n Georgieva cited a growing risk of divergence between fiscal and monetary policies, and urged countries to carefully calibrate those actions to avert any chance of fiscal support undermining central bankers\u2019 efforts to control inflation. \n \n\n \n \u201cWe need to create the same strong level of coordination between central banks and finance ministries so they provide support in a very targeted way \u2026 and don\u2019t weaken what monetary policies are aiming to achieve,\u201d she said. \n "

"We can\u2019t rule out a possible global recession

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