Growing uncertainty prompted the World Bank to further reduce its outlook for global growth for the year and warned many countries would fall into recession.
In the latest projection, World Bank President David Malpass said that most countries will face difficulties in avoiding recession.
The global economy is projected to grow 2.9% this year from 5.7% growth recorded in 2021. This estimate is also lower than the initial forecast made in January for an expansion of 4.1%.
According to the latest report on the Global Economic Outlook, growth is expected to hover at the same level throughout 2023 to 2024 as inflation remains above targets for most economies, pointing to the risk of stagflation.
Malpass said these gloom factors were due to the war in Ukraine, the closure of Covid-19 in China, supply chain disruptions and the risk of stagflation hurting growth.
Stagflation, a combination of unstable economic growth and high inflation, has been a major concern in recent times.
This trend is reminiscent of an unprecedented event, when oil shocks and a sluggish economy led to two recessions occurring in the early 1980s.
Growth in the advanced economies is projected to decline sharply to 2.6% in 2022 from 5.1% recorded in 2021 before declining further to 2.2% in 2023.
