Global economy 2023: In its latest projections on global economy, the World bank has warned that the global economy is at a risk of falling into recession this year. In its latest Global Economy Prospects reports published on Tuesday, World Bank said it is expecting the world economy to grow by just 1.7% this year showing a sharp fall from an estimated 2.9% from last year.
Ahyan Kose, the Washington based World Bank’s economist in an interview to The Financial times said, “The world’s economy is on razor’s edge and could easily fall into recession if financial conditions tighten.”
(Global economy 2023) The bank forecasts that advanced economies will expand by just 0.5% this year, down from an expected 2.5% growth last year. Growth in the rest of the globe is anticipated to remain constant at 3.4%. However, emerging nations outside of China will expand by 2.7% this year, down from 3.8% in 2022.
The report attributed the downward adjustments in its estimate to high interest rates, low investment, high inflation, and disruptions brought on by Russia’s invasion of Ukraine in late February.
A major decline in the rate of investment growth in emerging markets and developing countries is of even greater concern over the long run. With an outright contraction in 70% of these economies during the coronavirus pandemic, this decreased from 11% in 2010 to 3.4% in 2019, a much sharper decline than the one in 2009 following the global financial crisis. Future growth possibilities are constrained by the bank’s expectation that the rate will stay at 3.5% at least through 2024.
The World Bank is a global institution that aids developing nations in eradicating poverty. In the traditional sense of the word, the World Bank is not a bank. It comprises of two organisations instead – The International Bank for Reconstruction and Development that offers grants, loans, and credit.
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