The World Bank announces a global recession by stating that there will be “virtually no rebound” and that inflation will be above average for several years.
Posted on 8.6.2022 by Michael Robison
The World Bank warns of a global recession, saying there will be “virtually no rebound” and several years of above-average inflation are to be expected
According to the World Bank’s latest global economic forecast released on Tuesday, global economic growth is expected to slow before the end of the year, and most countries should start preparing for a recession.
In the report which has just been published, the world bank cut its global growth forecast for this year to 2.9%, down from a forecast of 4.1% released in January. The report also warns that several years of above-average inflation are ahead.
“Both inflation and slow growth are putting the global economy at risk,” says Liz Ann Sonders, chief investment strategist for Charles Schwab.
The World Bank cited Russia’s invasion of Ukraine, coupled with a still crippled post-pandemic economy, as the main reason for its change.
The international financial authority said it expected “essentially no rebound” next year, projecting just 3% growth for the world in 2023. This is a direct signal of an impending global recession.
The report highlighted the continued surging energy, rising food prices and rising bank interest rates central to more cynical perspectives.
“The global outlook faces significant downside risks, including heightened geopolitical tensions, a prolonged period of stagflation reminiscent of the 1970s, widespread financial stress caused by rising borrowing costs and worsening food insecurity,” the report says.
The World Bank reports that 100% of advanced economies and 80% of emerging and developing countries are currently experiencing above-target inflation.
The World Bank has also revised down the growth outlook for the United States in 2022, to 2.6% from 3.8% scheduled for January.
The World Bank has advised governments to cushion the shock of soaring energy and food prices. The group suggested easing the financial burden by extending debt relief.
The World Bank report warns that if geopolitical conditions do not start to improve, “global growth could be significantly weaker. »
