The United Nations Conference on Trade and Development (UNCTAD) is warning the world that it is now “on the edge of a recession,” in large part due to aggressive monetary policies being conducted by central banks in advanced economies.

The report predicts that higher interest rates, such as those being imposed by the US Federal Reserve, the Bank of England, and the European Central Bank, could precipitate a worse economic downturn than was seen in 2008.

The report stated, “All regions will be affected, but alarm bells are ringing most for developing countries, many of which are edging closer to debt default.”

Currently, East and Southeast Asia are about to post growth numbers below those seen in the five years before the Covid-19 pandemic. The agency further noted that just the US interest rate hikes so far this year will shave roughly $360 billion off of the future income made by developing nations, excluding China.

UNCTAD Secretary-General Rebeca Grynspan said, “We still have time to step back from the edge of recession. Nothing is inevitable. We must change course.”

The UNCTAD global growth projection was downgraded for 2022, from the 2.6% it had estimated in March, to 2.5%. The agency projects that growth next year will be 2.2%.

This comes on the heels of the International Monetary Fund issuing a warning last month that some countries may slip into a recession in 2023, as it downgraded its global growth forecast.