The head of the International Monetary Fund said that the risk of a global economic recession is on the rise.
Kristalina Georgieva, the Managing Director of the International Monetary Fund, told reporters on Wednesday that it would be a difficult year.
The spread of inflation, dramatic interest rate hikes by central banks, a slowdown in China's economic growth, and unprecedented sanctions against Russia are some of the factors affecting worldwide markets.
The global economy is expected to expand by 3.6% this year, but the fund will release a new estimate in the coming weeks that will lower that estimate. This would be the third downward revision of the estimate by the International Monetary Fund.
During the interview, she said that an economic recession can't be ruled out.
A growing chorus of warnings that have weighed on global stock markets has been added by the head of the International Monetary Fund. Jamie Dimon, CEO of JP Morgan Chase, warned of storm clouds in June.
The war in Ukraine is causing havoc in both markets, and investors are worried about rising prices for food, gas, and other goods.
According to the latest report from the Bureau of Labor Statistics, the U.S. inflation rate is the highest it has been in 30 years. The consumer price index went up in May. Ahead of the elections, the rising prices have become a political issue.
At an event in Kentucky this week, Senate Minority LeaderMitch McConnell claimed that the Biden administration was to blame for the rising prices due to the labor shortage.
Europe has experienced record-setting energy prices as a result of Russia's war in Ukraine that has limited access to fossil fuels.
Although market-watchers and investors have been sounding the recession alarm for months now, fears have increased as the US Federal Reserve has raised interest rates.
The global economic outlook would be complicated by a longer- lasting tightening of financial conditions.
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