World Bank

The World Bank on Tuesday slashed its global growth forecast and warned that many countries could fall into recession as the economy slips into a period of stagflation reminiscent of the 1970s.

Global economic expansion is expected to slip to 2.9% this year from 5.7% in 2021 — 1.2 percentage points lower than the 4.1% predicted in January, the Washington-based bank said in its latest Global Economic Prospects report.

The World Bank cut its global growth forecasts for 2022 on Tuesday and warned of the “sharpest slowdown in 80 years.”

In January, the international financial institution forecasted 4.1% economic growth for this year. In light of elevated inflation, lockdowns in China, the Russian invasion of Ukraine, and other phenomena, the World Bank revised its 2022 forecast to 2.9%.

For large and small nations around the globe, the hope of averting a recession is fading, the World Bank warned on Tuesday.

The grinding war in Ukraine, ongoing supply chain chokeholds, Covid-related lockdowns in China and dizzying rises in energy and food prices are battering economies all along the income ladder, saddling them with slower growth and surging inflation.

This suite of problems is “hammering growth,” David Malpass, president of the World Bank, said in a statement. “For many countries, recession will be hard to avoid.”

Ukraine’s economy is on course to contract by almost half this year as the Russian invasion and the impact of a “deep humanitarian crisis” takes its toll, the World Bank has said.

With a blockade of Black Sea ports in the south of Ukraine and the havoc caused to industry in the east, the war-torn country’s GDP is projected to shrink by about 45% in 2022.

The global economy is on track to grow at the fastest post-recession pace in 80 years, thanks to steady – but uneven – vaccine distribution, the World Bank said in a new report released Tuesday.

The Washington-based institution forecast that global growth will increase by 5.6% in 2021, an increase from its projection of 4.1% in January. By comparison, global GDP contracted at a 3.5% annualized rate in 2020, when economies across the world came to a near standstill to slow the spread of COVID-19.

U.S. President Donald Trump on Friday called for the World Bank to stop loaning money to China, one day after the institution adopted a lending plan to Beijing over Washington’s objections.

The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.

Large projects funded by the bank have left millions of poor people worse off an investigation found. The bank says the vast majority of its projects dont fall into this category.

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