The World Bank has warned that leading central banks risk pushing the global economy into a “devastating” recession next year if policymakers raise interest rates too sharply in the coming months and put pressure on financial markets.

The organization urged monetary authorities in major economies to coordinate to reduce the overall impact of tightening, and the World Bank urged governments to provide targeted assistance to vulnerable families rather than relying on monetary tightening to prevent inflation from exploding.

Central banks, led by the US Federal Reserve, launched a series of sharp interest rate hikes throughout 2022 in an attempt to tame inflation, which for the first time in the history of many advanced economies has reached or near bilateral trade levels (10% or more). decades.

World Bank President David Malpass said the global economic momentum is waning and more countries are already starting to collapse, adding: “I am deeply concerned that these trends will continue and have devastating long-term consequences for people in emerging markets and developing countries. He called for more measures to boost production and ease inflationary pressures rather than cut spending. He said the increase in investment “would boost productivity and capital allocation, which are critical to growth and poverty reduction.”