With banks heading to raise interest rates, expectations of a global economic recession

The World Bank has warned in a new study that the global economy will fall into recession over the next year, and this is due to the fact that the attention of central banks is currently focused on raising interest rates and neglecting basic economic measures to curb inflation.

The study predicted that a series of financial crises would hit emerging market and developing countries in a way that would lead to their irreversible economic and financial damage.

The World Bank noted that an unprecedented increase in interest rates by central banks may not be enough to reduce the deteriorating global inflation rates to the levels that prevailed before the outbreak of the coronavirus pandemic.

The Bank stressed the need for large countries to take a set of economic measures to solve this problem instead of focusing on raising interest rates. Such measures include:

Easing restrictions on the labor market, increasing the number of workers while reducing price pressure in such a way as to facilitate the return of laid-off workers to their jobs.
Strengthening the global supply of commodities.
Increasing global food and energy supplies.
Strengthening international trade networks, including eliminating bottlenecks in global supply chains.
The creation of a new international economic order based on fair economic rules, avoiding the danger of protectionist economic policies.