A UN agency warned on Monday of the risk of a monetary policy-induced global recession that would have especially serious consequences for developing countries.
"Excessive monetary tightening could usher in a period of stagnation and economic instability" for some countries, the United Nations Conference on Trade and Development (UNCTAD) said in a statement released alongside its annual report.
"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," it said.
The report said that higher interest rates, including hikes by the U.S. Federal Reserve, would have a more severe impact on emerging economies, which already have high levels of private and public debt.
"The possibility of a widespread developing country debt crisis is a very real one," said the report entitled 'Development prospects in a fractured world'.
Overall, UNCTAD revised down its 2022 growth projection by to 2.5%, from 2.6% estimated in its March assessment. It expects growth of 2.2% in 2023.
The International Monetary Fund also warned last month that some countries may slip into recession next year and revised its growth forecast downwards.