International

WB Sounds Alarm Over Potential Global Recession

WASHINGTON, DC, USA – Grim news from the World Bank as its latest global economic prospects report is sounding the alarm for developing economies and foreshadowing a potential global recession.

Published

3 years ago

January 11, 2023

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WASHINGTON, DC, USA – Grim news from the World Bank as its latest global economic prospects report is sounding the alarm for developing economies and foreshadowing a potential global recession.

A statement from the bank, Tuesday, saying global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine.

Given current fragile economic conditions, any new adverse development, such as higher-than-expected inflation or a resurgence of the COVID-19 pandemic, among other things, could push the global economy into recession.

Over the next two years, growth in developing economies is projected to average 2.8 percent, a full percentage point lower than the 2010-2019 average. Meanwhile the report notes growth in advanced economies is projected to slow from 2.5 percent in 2022 to 0.5 percent in 2023.

The bank notes that over the past two decades, slowdowns of this scale have foreshadowed a global recession and says this would mark the first time in more than 80 years that two global recessions have occurred within the same decade.

The report also lays out options for policy makers to accelerate investment growth.