The World Bank warned in a new study that the global economy may fall into recession next year, and attributed this to the fact that central banks are currently focused on increasing interest rates, and neglecting basic economic measures to curb inflation.
The study expected that a series of financial crises would hit emerging market and developing economies in a way that would cause them to suffer permanent economic and financial damage.
The World Bank pointed out that the unprecedented rise in interest rates by central banks may not be enough to reduce the exacerbating global inflation rates to the levels that prevailed before the outbreak of the Corona pandemic.
The bank stressed the need for the major countries to adopt a set of economic measures to solve this problem instead of focusing on raising interest rates.
These measures include:
Alleviating the restrictions imposed on the labor market, enhancing the size of the workforce, while reducing price pressures in a way that contributes to returning the laid-off workers to their jobs.
Strengthening the global supply of primary commodities.
Increase the global supply of food and energy products.
Strengthening international trade networks, including relieving bottlenecks in global supply chains.
Create a new international economic order based on fair economic rules, and avoid the danger of protectionist economic policies.