Monitoring Desk
WASHINGTON, DC: The world economy is “perilously close to falling into recession”, the World Bank has warned in its latest forecast.
The global financial institution has projected that the global economy will grow by only 1.7 percent this year – a sharp decline from the 3 percent it predicted in June.
The 1.7 percent growth figure would be the lowest since 1991, except for the recessions of 2009 and 2020, which were caused by the global financial crisis and the Covid-19 pandemic.
Russia-Ukraine war behind projected recession
The report says a number of factors stemming from Russia’s invasion of Ukraine and the impact of the pandemic are responsible for this recession.
The effects of higher interest rates are considered a key challenge for policymakers to overcome.
David Malpass, the president of the World Bank, said the downturn would be “broad-based” and growth in people’s earnings in almost all parts of the world was expected to “be slower than it was during the decade before Covid-19”.
The World Bank said the US, the Eurozone and China – the three most influential regions of the world with regards to economic growth – were “all undergoing a period of pronounced weakness”, a plunge that was further worsening problems faced by poorer countries.
