The world Bank it lowered its 2022 global growth forecast on Tuesday to 2.9% from its 4.1% estimate published in January, Reuters reported. The World Bank said the Ukraine war will reduce per capita income in developing economies by 5.0% from its pre-COVID-19 trend.
World Bank President David Malpass said the risks of stagflationthe russian-ukrainian war and the closures in China have been affecting growth and that it will be difficult to avoid a recession for many countries. Meanwhile, while global inflation is expected to moderate next year, it is likely to remain above target in many economies.
The international organization reduced its growth forecast in advanced economies at 2.6% in 2022 compared to its January estimate of 3.8% and lowered its estimate for emerging economies to 3.4% from 6.6% in January. The bank warned that it sees a real threat that a faster-than-expected tightening of financial conditions could push some countries into the kind of debt crisis seen in the 1980s.
Source: Fx Street
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