On Monday a United Nations agency warned that central banks pursuing policies of monetary tightening could trigger a global recession that will have especially devastating consequence to developing nations, and it urged central banks seek out a new strategy.

The United Nations Conference on Trade and Development (UNCTAD) said in a statement released with its annual report, that for some nations, “Excessive monetary tightening could usher in a period of stagnation and economic instability.” The report was titled “Development prospects in a fractured world.”

It went on, “Any belief that they (central banks) will be able to bring down prices by relying on higher interest rates without generating a recession is, the report suggests, an imprudent gamble.”

The report emphasized that the monetary policies pursued by central banks like the US Federal Reserve have a much more severe impact on emerging economies, which are already suffering from higher levels of public and private debt. The report went on to emphasize there was a looming debt crisis in the developing world.

UNCTAD Secretary-General Rebeca Grynspan said to the media, “The current course of action is hurting vulnerable people everywhere, especially in developing countries. We must change course.”

When asked what alternative measures the UN recommended, she cited other methods of tackling inflation, including windfall taxes on corporations, more regulation of commodity speculation, and pursuing other measures to control supply-side bottlenecks.

She added, “If you want to use only one instrument to bring inflation down…the only possibility is to bring the world to a slowdown that will end up in a recession.”

UNCTAD revised its 2022 global growth projection down from the earlier 2.6% estimated in its March estimate to 2.5%. It projects a growth rate of 2.2% in 2023.

This warning comes after the International Monetary Fund revised its growth forecast for next year downward, and warned that some countries may even slip into recession.