dollar and generally lower oil prices, as well as generally strong balance sheets at major financial institutions. While there were similarities to conditions back then, there were also important differences, including the strength of the U.S. The report warned that interest rate increases required to control inflation at the end of the 1970s were so steep that they touched off a global recession in 1982, and a string of financial crises in emerging market and developing economies.Īyhan Kose, director of the World Bank unit that prepares the forecast, told reporters there was "a real threat" that faster than expected tightening of financial conditions could push some countries into the kind of debt crisis seen in the 1980s. ![]() ![]() With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer."īetween 20, the pace of global growth is projected to slow by 2.7 percentage points, Malpass said, more than twice the deceleration seen between 19. "Subdued growth will likely persist throughout the decade because of weak investment in most of the world. "The danger of stagflation is considerable today," Malpass wrote in the foreword to the report. Malpass said global growth was being hammered by the war, fresh COVID lockdowns in China, supply-chain disruptions and the rising risk of stagflation - a period of weak growth and high inflation last seen in the 1970s. In a news conference, World Bank President David Malpass said global growth could fall to 2.1% in 2022 and 1.5% in 2023, driving per capita growth close to zero, if downside risks materialized. ![]() The war in Ukraine had magnified the slowdown in the global economy, which was now entering what could become "a protracted period of feeble growth and elevated inflation," the World Bank said in its Global Economic Prospects report, warning that the outlook could still grow worse. WASHINGTON, June 7 (Reuters) - The World Bank on Tuesday slashed its global growth forecast by nearly a third to 2.9% for 2022, warning that Russia's invasion of Ukraine has compounded the damage from the COVID-19 pandemic, and many countries now faced recession.
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