IMF chief economist warns that world could be 'teetering on the edge of a global recession'

The chief economist of one of the world's premier financial institutions warned this week that the global economy could be facing a major recession in the very near future, one of the most authoritative voices yet to predict significant short-term economic disruption.

International Monetary Fund Chief Economist Pierre-Olivier Gourinchas said in a blog post on Tuesday that the worldwide economy "is facing an increasingly gloomy and uncertain outlook," with multiple recent predictions from the IMF having "begun to materialize," he claimed. 

"Higher-than-expected inflation, especially in the United States and major European economies, is triggering a tightening of global financial conditions," Gourinchas wrote. "China’s slowdown has been worse than anticipated amid COVID-19 outbreaks and lockdowns, and there have been further negative spillovers from the war in Ukraine. As a result, global output contracted in the second quarter of this year."

"The outlook has darkened significantly since April" and the last IMF outlook, the economist wrote, arguing: "The world may soon be teetering on the edge of a global recession, only two years after the last one."

The warning from the IMF comes as numerous other economic analysts are making similar predictions, citing sharp slowdowns in the U.S. amid record-high inflation as major warning signs for a coming contraction. 

The potential coming economic pain has not escaped notice of the Biden administration: Appearing to anticipating negative economic news, the White House last week put forth an alternative definition of recession, one that argued that sequential quarterly declines of GDP—long a traditional benchmark for economic contraction—did not necessarily indicate a recession.