A leader of the International Monetary Fund (IMF) has warned the world is heading towards an age of greater instability. 

Recession risks are coming alongside a “fundamental shift” away from relative stability to an age of breakdown in international relations and more frequent natural disasters, IMF managing director Kristalina Georgieva says. 

An ongoing series of economic shocks has prompted persistently high inflation, triggering a cost of living crisis around the world.

Speaking ahead of the IMF’s annual meeting of up to 190 member countries next week, Dr Georgieva said attempts to deal with impacts of COVID-19, Russia’s war in Ukraine and climate disasters is only being made more difficult by geopolitical fragmentation.

She said the IMF would issue downgrades to its growth forecasts for next year, because “we are experiencing a fundamental shift in the global economy”. 

The world is moving from “relative predictability … with a rules-based framework for international economic cooperation, low interest rates, and low inflation” into a new age of heightened economic fragility.

The IMF leader said this means “greater uncertainty, higher economic volatility, geopolitical confrontations, and more frequent and devastating natural disasters – a world in which any country can be thrown off course more easily and more often”.

The IMF has downgraded its growth projections three times, down to 3.2 per cent for 2022 and 2.9 per cent for 2023. 

“As you will see in our updated World Economic Outlook next week, we will downgrade growth for next year,” Dr Georgieva said. 

“And we will flag that the risks of recession are rising.”