World Bank on Tuesday sharply lowered its forecast for The global economy warning that Russia invasion of Ukraine doubled the damage caused by the COVID-19 pandemic, with many countries Probably face Recession.
The anti-poverty agency, which includes 189 countries, expects world economy 2.9% will expand this year. can happen down from 5.7% global growth in 2021 It is 4.1% predicted for 2022 back in January.
He indicated the possibility of Widespread food shortages and concerns about a possible return of ‘Stagflation’ – a toxic combination of High inflation and stagnation growth invisible for more of four decades.
‘For many countries it will be stagnation hard To avoid, said David Malpass, president of the World Bank.
The agency does not expect a brighter picture in 2023 and 2024: It Expects just 3% global growth for Both years.
For the United States alone, the World Bank cut it growth 2.5% expected this year from 5.7% in 2021 It is 3.7% that I expected in January.
for Europe Nineteen countries who – which share The euro currency, it has lowered growth Outlook to 2.5% this year from 5.4% last year It’s the 4.2% I expected in January.
In China , world’s second- the biggest economy After the United States, the World Bank expects growth That slows to 4.3% from 8.1% last year.
China zeroCOVID-19 Policies, Including Strict Lockdowns in Shanghai and other cities, caused economic life to freeze. Chinese government Provides economic pain relief assistance.
new market Developing economies combined are expected to grow by 3.4% this yearslowed down from 6.6% pace in 2021.
Russia invasion of Ukraine has been severely disrupted global trade in Energy, wheat and mixing a global economy which has been recovering strongly from the coronavirus pandemic. Already high commodity prices have risen higher K resultwhich threatens availability of Affordable food in poor countries.
The global economy Enter what would become a ‘long time of weak growth and high inflation,” the World Bank said in Global Economic Prospects Report.
“There is a severe problem risk of malnutrition and of deepen hunger even of Malpass warned of famine.
The World Bank expects oil prices to rise 42% year And the for Non-energy commodity prices for climb approximately 18%. But it expects oil and other commodity prices to fall by 8%. in 2023. Like current spike in Energy and food prices for oil shocks of the seventies.
The agency warned of “additional adverse shocks”. in that it new The Global Economic Prospects report, “will increase the likelihood that global economy will experience a period of Stagflation reminds us of stagflation of the seventies. ”
“The danger of Malpass wrote: “Stagflation today.” in Introduction to the report.
Prospect of Stagflation is a problem for The US Federal Reserve (Fed) and other central banks: If they keep raising interest rates to combat Inflation, hm risk cause a recession. But if they try to stimulate their economies, they do risk Driving prices higher And keep inflation even more intractable problem.
The World Bank indicated that the previous period of Inflation accompanied by economic stagnation required rate increases so strongly that they tend world In the stagnation led to series of financial crises in developing world.
