Subhechcha Ganguly 
According to a recent World Bank study, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging markets and developing economies that would harm them in the long run if central banks around the world raise interest rates at the same time in response to inflation. According to a report from news agency ANI, interest rates have been rising globally this year with a degree of coherence unseen in the previous fifty years. This trend is expected to last well into next year.
The global economy is currently experiencing its steepest slowdown since 1970, and several indicators of a global recession are already “flashing signs,” the report claims. To keep core inflation in check, central banks may raise interest rates globally by as much as 4%. Compared to a 6.71% increase in July, India’s retail inflation increased by 7% in August as a result of higher food prices.
“Global growth is sharply slowing, and it is likely to continue to slow as more nations experience recessions. David Malpass, president of the World Bank, said in a statement on Thursday, “My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies.
The three biggest economies in the world, the US, China, and the euro area, were said to have been sharply slowing down, according to a study.The rate of price growth, or inflation, recently reached a 40-year high in the US and the UK. Demand increased as restrictions related to the pandemic loosened, and prices for energy, fuel, and food rose as a result of the conflict in the Ukraine. In response, interest rates have been increased by central bank policymakers to reduce demand from consumers and businesses. Large rate increases, however, raise the possibility of a recession because they can slow an economy, according to the BBC.
