Economic Buzz: Global Growth Expected To Fall From 5.7% In 2021 to 2.9% In 2022 Says World Bank

8 Jun 2022 , 12:57 PM

The World Bank on Tuesday cut its global growth forecast to 2.9% for 2022 and warned of the world economy slipping into a period of stagflation reminiscent of the 1970s. Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, according to the World Bank’s latest Global Economic Prospects report. This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike. Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent that was anticipated in January. It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn. As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend.Powered by Commodity Insights