The World Bank has lowered its forecasts for global economic growth from 3% (as forecast in June 2022) to 1.7%, Report informs referring to Deutsche Welle.
This is the lowest figure in the last 30 years, except for the crisis years of 2009 and 2020.
Due to the war in Ukraine and the increase in interest rates by national central banks, many countries are on the verge of recession. Thus, the growth rates of the economies of industrialized countries will noticeably decrease, experts of the organization believe. In particular, for the US, as well as for the eurozone states, growth rates will amount to only 0.5%, analysts at the World Bank say.
At the same time, the forecast expresses fear of a global recession, which could begin as a result of unexpected shocks, such as another round of geopolitical tensions or a new outbreak of the coronavirus pandemic.
Meanwhile, developing countries may face the problem of investment outflow, according to the forecast. These states are suffering from large amounts of public debt and a weak national currency.
The Chinese economy will grow by 4.3% in 2023, according to the World Bank. This is 0.9% less than expected in the June 2022 forecast. Due to strict restrictions to combat the coronavirus, as well as the situation in the real estate market and a slump in demand, China’s GDP grew by only 2.7% in 2022, which was one of the weakest performance since the mid-1970s.