World Bank reduces economic prediction as global crisis is predicted

• The world economy is perilously close to entering a recession.
• It projects that the global economy will expand by just 1.7% this year.
• The effects of increasing interest rates are seen as the main obstacle facing policymakers.

According to the most recent World Bank prediction, the world economy is “perilously close to entering a recession.”

It projects that the global economy will expand by just 1.7% this year, which is much less than the 3% it anticipated in June.

The paper assigns blame for a number of things, including the pandemic’s effects and Russia’s invasion of Ukraine.

The effects of increasing interest rates are seen as the main obstacle facing policymakers.

David Malpass, president of the World Bank, predicted that the slump would be “broad-based” and that global wage growth would likely “be weaker than it was during the decade before COVID-19.”

Except for the recessions of 2009 and 2020, which were brought on by the global financial crisis and the Covid epidemic, the 1.7% growth rate would be the lowest since 1991.

According to the World Bank, the three regions with the most influence on global economic growth—the US, the Eurozone, and China—are “all facing a period of severe weakness,” which is making matters worse for less developed nations.
The world’s richest economies are expected to have a dramatic decline in GDP from 2.5% in 2022 to only 0.5% this year after rising 5.3% in post-pandemic 2021.

The bank cautioned that “slowdowns of this scale have historically foretold a global recession” and that it was expecting “a dramatic, long-lasting slowdown.”

The occurrence of a worldwide recession would mark the first instance since the 1930s when there were two such downturns in the same decade.