The World Bank says most countries are headed for a recession
The rate of global growth is expected to slow from 5.7% in 2021 to 2.9% this year, according to the report. The World Bank, which acts as an international lending body for developing economies, had forecasted 4.1% growth for 2022 last January.
The global economy had already been impaired by the aftereffects of the COVID-19 pandemic, which left international supply chains in tatters and significantly hampered income growth and poverty reduction efforts in developing countries, according to the report.
This led the World Bank to predict a slower yet robust next few years of global growth starting from 2022, but after the outbreak of the war in Ukraine, the institution was forced to significantly downgrade its expectations to account for soaring food and fuel prices and disrupted international trade networks.
But the World Bank is warning that even a mild recession could leave lasting scars on the global economy, as the combination of today’s economic forces could lead to “stagflation,” a mixture of low growth and high prices that is toxic to economies in developing countries.
