A global recession is an extended period of economic decline that spans many economies. These periods tend to be more synchronized than individual country recessions, because international financial systems and trade relations can transmit economic shocks from one economy to another. The IMF uses several criteria to identify global recessions, including a drop in global real GDP per capita over a prolonged period of time. This measure is notoriously difficult to quantify, however, given the varying rates of inflation and purchasing power parity (the number of goods or services that a unit of local currency can buy in different countries) across countries.

The last global recession began in mid-2006, and was characterized by sharply falling US house prices. The collapse in house prices led to declining construction activity and increased foreclosures, which in turn lowered consumer spending. From its peak, US GDP declined for eighteen months and unemployment rose sharply. This was the most severe downturn since the Great Depression, and the world economy recovered slowly in the wake of it.

While the risk of a global recession has receded somewhat as a result of detente between the United States and China, rising risks are still in place. The recent slump in global stock markets reflects uncertainty about the future course of monetary policy, as well as concerns about overheated asset bubbles. In addition, the re-emergence of the COVID-19 pandemic, heightened geopolitical tensions, and persistently high inflation are all raising questions about the sustainability of current growth.