The global economy will come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies - the United States, Europe and China - the World Bank has warned. 7NEWS
In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth for 2023 by nearly half, from its previous projection of 3 per cent to just 1.7 per cent.
The World Bank report also noted that rising interest rates in developed economies like the US and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment. “The outlook is particularly devastating for many of the poorest economies where poverty reduction has already ground to a halt and access to electricity, fertiliser, food and capital is likely to remain limited for a prolonged period.”
“Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” Malpass said. The report follows a similarly gloomy forecast a week earlier from Kristina Georgieva, the head of the International Monetary Fund, the global lending agency. Georgieva estimated on CBS news program Face the Nation that one-third of the world will fall into recession this year.
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