The World Bank warns that a second global recession is imminent as it reduces its growth forecasts for nearly all advanced economies this year.
David Malpass, President of the World Bank, stated that Russia’s war on Ukraine, persistently high inflation, and global interest rate increases could add to the “already disastrous” legacy of Covid, and the resulting global lockdowns.
From previous projections of 3pc for both years, the institution has downgraded its global growth forecasts to 1.7pc and 2.7pc for 2024.
Economists warned that the global economy remained “fragile”, adding: “higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the Covid-19 pandemic, or escalating geopolitical tensions could push the global economy into recession.”
This would be the first time that two global recessions have happened in the same decade since the Second World War.
As it reduced its growth forecasts for almost all advanced economies and nearly 70% of developing markets, the World Bank blamed the sharp slowdowns in China, the US and the eurozone for the downgrades.
The growth rate in advanced economies will slow to 2.5pc by 2022 and 0.5pc by 2023. The World Bank stated that slowdowns on this scale over the past 20 years have been a sign of a global recession.
“The crisis facing the development sector is growing as the global growth outlook deteriorates,” said Mr Malpass. “Weaknesses in growth and in business investment will only exacerbate the already devastating reversals in education and health, as well as the rising demands of climate change.
