The risk of a global recession is growing as central banks focus on curbing soaring inflation rates, the World Bank warned on Thursday, urging governments to increase supply to ease restraints behind rising prices.

Global inflation has risen at its fastest rate in decades, fueled by supply constraints amid high demand as countries emerged from the pandemic. It has been exacerbated this year by the Russian invasion of Ukraine and the Covid lockdowns in China.

The major central banks have reacted vigorously, raising borrowing costs to dampen demand and dampen sweltering inflation.

But in a new paper, World Bank economists warn that the measures may not be enough to bring high prices under control, leading to a need for further rate hikes, which in turn will slow growth.

Many countries will not be able to avoid a recession, but the global slowdown and tightening of monetary policy “could result in significant financial stress and trigger a global recession in 2023,” the paper said.

In this scenario, global GDP growth would slow to 0.5 percent in 2023 – a 0.4 percent drop in per capita growth, which fits the technical definition of a global recession.

“Global growth is slowing sharply, with a further slowdown likely as more countries slide into recession,” World Bank President David Malpass said in a statement.

“My deep concern is that these trends will continue, with long-lasting consequences that are devastating for people in emerging and developing countries.”

He urged policymakers to “shift their focus from reducing consumption to increasing production.”

The World Bank lowered its forecast for global growth to 2.9 percent in early June, more than a full point lower than the January estimate.

Indermit Gill, the Washington-based development lender’s newly appointed chief economist, said his biggest concern is that due to the slowdown and the pandemic crisis, “poverty reduction has stopped.”

But he also expressed a certain optimism.

“It’s not just a doomsday story,” he told reporters, noting that because of the work done to improve economic policies and management before the pandemic, countries are in a better position to protect the poor.

“I have a feeling we’re going to come out of this on the right side because the world has changed now and you know there’s a lot more opportunity,” he said.

The worst-case scenario outlined in Thursday’s paper would entail a recession in advanced economies and a sharp slowdown in growth in emerging and developing economies.

“The global economy is now in its worst slowdown since a post-recession recovery since 1970,” the World Bank said.

“Under the circumstances, even a moderate hit to the global economy next year could plunge it into recession.”