The World Bank has issued a global recession warning. “Recession will be difficult to avert for many nations,” stated World Bank President David Malpass. “This is the most significant slowdown in the last 80 years.”
On Tuesday, the World Bank issued a warning about the increased risk of stagflation and global recession. President of the World Bank, David Malpass, said:
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid. Markets look forward, so it is urgent to encourage production and avoid trade restrictions. Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality.”
The World Bank president mentioned that we aren’t in a global recession for now but that “the downside risk is that it could be a global recession. This is the sharpest slowdown in 80 years.”
He added:
“That’s from the 2021 rate which was high because of the recovery from Covid to what we are looking at now, 2.9%, in 2022. That’s a very sharp slowdown and it’s really hitting the poorer countries hard.”
In a report issued Tuesday, the Bank described: “Global growth is expected to slump from 5.7% in 2021 to 2.9% in 2022 — significantly lower than 4.1% that was anticipated in January.”
The Bank also issued a warning on stagflation, indicating that the risk of stagflation is high. In addition, the World Bank warned that inflation and weak growth could last for years.
Malpass continued: “The reason that this is a prolonged risk for the world is that we are coming off of a very exceptionally low period of interest rates. Last year, I called it uncharted territory on both fiscal policy … and monetary policy.”