His organization's latest forecast predicts that global growth will slow to 4.1% this year from 5.5% in 2021. The recession is due to the virus threat, reduced government support, and an early recovery in demand. But Mr. Malpass said his biggest concern is growing global inequality.
"The outlook for a weaker country is still far behind. That causes insecurity. " By 2023, economic activity in all advanced economies, such as the US, Euro area, and Japan, is likely to have recovered from the hit it took during the pandemic, the bank said.
But output in developing and emerging countries is expected to remain 4% lower than it was before COVID struck. Mr. Malpass blamed stimulus programs in the richest countries for worsening the divide by driving global inflation.
While officials in many countries, including the US, are now expected to raise interest rates to try to rein in price increases, Mr. Malpass warned that higher borrowing costs could hurt economic activity, especially in weaker economies.
"The problem with rate hikes is that they hurt people that need floating rate money." And these are usually new businesses, women-owned businesses, or businesses in the developing world, said Malpass. Separately, the World Economic Forum (WEF) warned that unequal economic recovery makes it difficult to cooperate on global tasks such as climate change.
Expanding differences within and between countries will make it more difficult to control COVID-19 and its variants, as well as slow collective action against a common threat that the world cannot ignore if it is not reversible.
World Economic Forum Global Report. The World Bank's Global Economic Outlook says the global economy will recover from the pandemic in 2021, with the strongest growth since the crisis in 80 years.
Rising prices for raw materials such as food and energy are straining households. According to the report, global inflation is at its highest level since 2008.
Banks lending money to countries around the world have warned that supply chain bottlenecks and phase-outs of stimulus programs could pose risks.
The slowdown in the second half of 2021 was already more than expected by the bank in its June forecast due to the spread of Omicron and Delta Covid variants. A "clear slowdown" is expected this year, with global growth expected to slow further to 3.2% in 2023.
The reality is that coronavirus and quarantine continue to wreak havoc, especially for people in poor countries," said Malpass.
"It's just a bleak prospect. China, where growth is expected to fall to 5.1% from 8% last year, and the United States, where growth is expected to fall to 3.7% this year from 5.6% in 2021, are the driving forces behind the global recession.
Eurozone's growth is expected to slow to 4.2% this year from 5.2%, the bank said. India marks a bright spot this year, with GDP expected to grow from 8.3% to 8.7%.
However, many emerging markets continue to grapple with additional issues, such as low immunization rates.
For example, growth in Latin America and the Caribbean is projected to slow to 2.6% in 2022 from 6.7% last year is projected to slow to 2.6% in 2022 from 6.7% last year.
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