New Telegraph

World Bank, IMF see rising risks of global recession

World Bank’s President David Malpass and International Monetary Fund’s (IMF) Managing Director, Kristalina Georgieva, said there was a growing risk of global recession, with inflation remaining a continuing problem after Russia’s invasion of Ukraine.

“There’s a risk and real danger of a world recession next year,” Malpass said in a dialogue with Georgieva yesterday, at the start of the annual meetings of the two institutions.

He cited slowing growth in advanced economies and currency depreciation in many developing countries. Georgieva said the IMF saw “a significant problem” in China, the world’s second largest economy, where volatility was dragging down growth.

Meanwhile, at a session with civil society groups yesterday, the IMF MD said she hoped debt restructuring efforts for Zambia and Chad could be completed by the end of the year, which would pave the way for more countries to seek help. She said though a Group of 20 initiative launched in late 2020 had been slow to become operational, she was upbeat about the cases of Chad and Zambia, who together with Ethiopia were the first to request help.

Georgieva said the IMF was pressing for more predictability and timely resolution of requests for help under the G20 Common Framework. It was also critical to expand the framework to include middle- income countries, she said.

The IMF is also working on how to include collective action clauses in debt contracts being signed today that would allow immediate suspension of debt ser-vice payments if a country experienced a climate shock, she said.

IMF and World Bank officials have repeatedly singled out China, the biggest creditor to many African countries, and private sector creditors for dragging their feet on reducing countries’ debt burdens.

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