IMF chief Kristalina Georgieva on Thursday urged global policymakers to take concerted action to avoid a “dangerous ‘new normal'” as risks of a global recession from repeated economic shocks mount.

Speaking at the fund’s annual meeting next week, the IMF’s Managing Director said it was crucial “to stabilize the global economy by addressing the most immediate challenges” – including rampant inflation.

Policymakers must act together to “prevent this period of heightened fragility from becoming a dangerous ‘new normal,'” Georgieva said.

But she warned that the process will be painful – and that if central banks act too aggressively to contain price pressures, it could trigger a “prolonged” economic downturn.

Finance ministers and central bank governors from more than 180 nations will convene in Washington next week for the first fully face-to-face meeting of the International Monetary Fund and World Bank since 2019 before the Covid-19 pandemic.

Amid the “darker global outlook…recession risks are rising,” Georgieva said, announcing that the crisis lender plans to again lower its forecast for the global economy for 2023 in forecasts due to be released next week at the annual meeting.

A third of countries are expected to contract for at least two quarters, and “even if growth is positive, it will feel like a recession” because rising prices eat into incomes, she said.

The fund in July lowered its growth forecast to 3.2 percent this year and 2.9 percent next year – the third straight downgrade.

The meetings come at a difficult time for the global economy as the pandemic is largely under control but rising inflation and interest rates now threaten to spread around the globe and stifle incipient recoveries.

“In less than three years, we’ve had shock after shock,” Georgieva said in her speech at Georgetown University.

Global supply shortages were already a challenge as demand surged as the pandemic slowed and global inflation stoked, and strains worsened in the wake of Russia’s invasion of Ukraine – which Georgieva called a “pointless war” – sending food and food prices into the soar high.

“Far from being temporary, inflation has become more intractable,” and taking action before high prices become entrenched is a key challenge for policymakers, Georgieva said, warning that “the cost of a policy misstep can be enormous”.

“Not tightening enough would result in inflation being unanchored and stuck,” but “moving too hard and too fast — and doing so in a cross-country manner — could push many economies into a prolonged recession,” she said.

Despite the risks, central banks must continue to “act decisively”.

“It’s not easy, and it won’t be painless in the short term,” she warned. “But the key is to avoid much greater and longer-lasting pain later for everyone.”

Georgieva stressed the need for fiscal policy to help the most vulnerable sections of society, but warned that efforts must be directed “with a laser-sharp focus on low-income households” to avoid acting against the tide of monetary policy.

She warned against relying on price controls that are neither affordable nor effective.

The pandemic forced many countries to borrow more, and now many are already facing or at risk of a debt crisis amid rising interest rates. That “increases the risk of a worsening debt crisis,” which could further hurt global growth.

To mitigate the risk, “big creditors like China and private creditors have a responsibility to act,” she said, calling for “quicker and more predictable” action on debt restructuring.