WBG forecasts stagnation for EU, 0.5% growth for US, 4.3% for China

By Al Mayadeen English
Source: Agencies
10 Jan 2023 19:36

The world economy is projected to grow at 1.7% in 2023 but warned that a recession could hit at any time.

A man walks by monitors showing Japan's Nikkei 225 index and other countries' stock market indexes at a securities firm in Tokyo, Friday, Dec. 2, 2022 (AP Photo/Hiro Komae)

The World Bank's most recent report issued on Tuesday, the Global Economic Prospects report, revealed some gloomy forecasts that were estimated according to past and current economic trends.

Among some of the report's notable forecasts include predictions for the growth of the euro area, which is expected to grow at 0% in 2023, down 1.9% points from previous forecasts.

"In 2023, euro-area growth is expected at zero percent—a downward revision of 1.9 percentage points," the World Bank said in a release about its Global Economic Prospects report.

This is a clear indication that inflation and the energy crisis are having a concrete impact on the Euro economies.

However, the World Bank estimates that by 2024, the economy will get back on track with a 2.8% growth.

With regards to China, the report forecasts that growth is projected at 4.3% for the year 2023, which is 0.9% point below previous forecasts, according to a press release issued about the report.

For the US, the Bank forecasted US growth to drop to 0.5% in 2023, "1.9 percentage points below previous forecasts and the weakest performance outside of official recessions since 1970," according to a press release issued by the Bank on the report.

Overall, the world economy is projected to grow at 1.7% in 2023 but warned that a recession could hit at any time.

"The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies," the World Bank said in a press release.

But the fragile geopolitical landscape could result in some serious consequences "such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions" which could all push the global economy into recession, the report states.

"This would mark the first time in more than 80 years that two global recessions have occurred within the same decade".

In light of the recent geopolitical trend which has shifted away from the hegemony of the dollar, countries like China and Russia have shown economic resiliency at unprecedented levels.

The report presented by the World Bank is merely a projection of western fears as the world is gradually shifting from a unipolar world to a multipolar world.