Home Markets Inflation could spark new global financial crisis, says Russia’s central bank

Inflation could spark new global financial crisis, says Russia’s central bank

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Global Economy updates

Russia’s central bank says a new financial crisis on the scale of the 2008 collapse could happen in less than 18 months if global inflation is not kept in check.

A surge in public and private sector debt levels during the recovery from the pandemic could cause the global economy to “deteriorate drastically and rapidly” if the US Federal Reserve has to jack up interest rates to quell inflation, the Bank of Russia warned in its annual monetary policy forecast.

The report, published on Thursday, said that global gross domestic product growth could slow to just 1.1 per cent as higher interest rates prompt investors to dump risky assets. Emerging market countries with high levels of foreign debt would be particularly hurt.

“Risk premiums will increase significantly, the most indebted countries will struggle to service their debt, and…

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