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World Bank sees marked slowdown in world growth, risk of ‘hard landing’ for poorer


The World Bank on Tuesday cut its economic growth forecasts in the United States, the euro area and China, and warned that high debt levels, rising income inequality and COVID- 19 threatens the recovery in developing economies.

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It said global growth is expected to decelerate “distinctively” to 4.1% in 2022 from 5.5% last year and further decline to 3.2% in 2023 as demand pummeled. dissipated and governments withdrew the huge financial and monetary support provided early in the pandemic.

Forecasts for 2021 and 2022 are 0.2 percentage points lower than the bank’s June Global Economic Outlook report. https://www.reuters.com/world/world-bank-boosts-growth-forecasts-us-stim …. International Monetary Fund https://www.reuters.com/business/imf-delays-release-new-forecast-jan-25 -… It is also expected to lower its growth forecast in an update on January 25.

The bank’s latest semi-annual forecast cited a major recovery in economic activity in advanced and developing economies in 2021 after developing and declining economies in 2020. , but warned that longer-lasting inflation, ongoing supply chain and workforce issues and new COVID-19 variants are likely to slow growth worldwide.

“There’s a marked slowdown going on,” Ayhan Kose, director of the World Bank’s Outlook group, told Reuters in an interview. “Policy support is being withdrawn and there are loads of risks ahead of us.”

Kose said the rapid spread of the highly contagious variant of Omicron shows continued disruption caused by the pandemic and said the surge that dwarfs health care systems could drop another 0.7 percentage points against the global forecast.

COVID-19 has caused nearly 300 million reported infections https://graphics.reuters.com/world-coronavirus-tracker-and-maps worldwide and more than 5.8 million deaths, according to figures compiled by Reuters.

While 59% of the world’s population has received at least one dose of the COVID-19 vaccine https://ourworldindata.org/covid-vaccinationAccording to the website Our World in Data, only 8.9% of people in low-income countries have received at least one dose of the drug.

Kose said the pandemic has widened the disparities in growth rates between advanced and developing economies, as well as within countries, which could increase social tensions and instability.

He said the risk of a “hard landing” for developing countries was growing due to their limited options for providing financial support when needed, persistent inflationary pressures and losses. financial gaps increased.

The report forecasts growth in advanced economies to slow to 3.8% in 2022 from 5% in 2021 and further to 2.3% in 2023, but says their output and investment will still going back to pre-pandemic trends in 2023.

The bank cut US GDP growth for 2021 by 1.2 percentage points to 5.6% and forecast a much lower growth of 3.7% in 2022 and 2, respectively. 6% in 2023. Japan’s GDP growth will reach 1.7% in 2021, 1.2 percent. down from the June forecast, rising to 2.9% in 2022.

China’s GDP is expected to grow 8% in 2021, about 0.5 percentage points less than the previous forecast, with growth slowing to 5.1% in 2022 and 5.2% in 2023.

Growth in emerging and developing economies is expected to slow to 4.6% in 2022 from 6.3% in 2021, to 4.4% in 2023, meaning output The output of these economies will remain 4% below pre-pandemic trends.

Fragile and conflict-affected economies will remain 7.5 percent below pre-pandemic trends, while small island states, rocked by the collapse of tourism, will be low. more than 8.5%.

The bank notes that rising inflation – which affects especially low-income workers – is at its highest level since 2008 in advanced economies and highest since 2011 in emerging economies. emerging and developing.

Kose said rate hikes pose additional risks and could further undermine growth forecasts, especially if the US and other major economies start raising rates this spring, months earlier. than expected.

He said the pandemic had also pushed total global debt to a half-century high and that concerted efforts were needed to accelerate debt restructuring efforts for debt-stricken countries and attract debt. involvement of private sector creditors.

The pandemic has sharply increased global inequalities in income, health care, economic growth and the scale of job losses, making it difficult for women and low-skilled and informal workers. more difficult.

“This trend has the potential to leave lasting scars,” Kose said, noting that disruptions in education can affect human capital for generations.





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