World Bank lowers global growth forecast for 2022 amid COVID-19 outbreaks

0

The global outlook is clouded by what World Bank Group President David Malpass called “exceptional uncertainty”.
Image credit: AFP

COVID-19 outbreaks, dwindling political support and persistent supply chain bottlenecks will see the global economic recovery cool more than expected in 2022, after last year’s expansion recorded the fastest post-recession pace in eight decades, the World Bank said.

Global gross domestic product is likely to grow 4.1% this year, less than the 4.3% forecast in June, the Washington-based development organization said in its biannual Global Economic Prospects report on Tuesday.

By 2023, annual production is expected to remain below the pre-pandemic trend in all regions of emerging and developing economies, while in advanced economies the gap is expected to narrow, he said. .

“There is a serious downturn underway,” Ayhan Kose, chief economist at the institution’s Prospects Group, said in an interview. The global economy “essentially follows two different flight paths: advanced economies fly high; emerging markets and developing economies are flying somewhat low and lagging behind. “

The global outlook is clouded by what World Bank Group President David Malpass called “exceptional uncertainty”.

Downside risks include new outbreaks of COVID-19, the possibility of unanchored inflation expectations and financial strains amid record debt levels, the bank said. In emerging markets with limited policy space to provide support, the risks increase the chances of a hard landing for their economies, he said.

In advanced economies, high vaccination rates and strong budget support have helped mitigate some of the negative economic effects of the pandemic. In contrast, the pace of recovery in emerging countries was further hampered by declining political support and tighter financing conditions.

Share.

About Author

Comments are closed.