World Bank chief forecasts global economic slowdown in upcoming year
4 Min Read
In light of various crises, the World Bank believes that the global economy will be quite stagnant through 2024.
-
People walk through the Westfield Stratford City shopping centre in London, Britain, December 5, 2020 (Reuters)
The global economy will likely enter a period of slow growth in the upcoming year due to persistent inflation and moderate investment, World Bank President David Malpass said on Sunday.
"I think, it's a long-lasting slowdown… And that has to do with the persistence of inflation, the shortage of new investment that is taking place right now, so as you look one year ahead and two years ahead, it is hard to see that there will be a strong recovery," Malpass told British broadcaster Sky News.
"It looks like this period of slow growth for the world may last into 2023-24, and that's a concern," the IBRD chief added.
According to Malpass, governments should adjust their spending to make it more efficient and consider providing "time-bound and targeted" subsidies instead of open-ended ones to help target inflation and soaring energy prices.
The West has been facing a massive energy crisis and soaring inflation in light of the post-pandemic global recession exacerbated by the harsh sanctions on Russia, which in turn led to disruptions in supply chains and resulted in a further hiking of energy prices all over the world.
The World Bank's most recent report issued earlier in the month, 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 eurozone, which is expected to grow at 0% in 2023, down 1.9% points from previous forecasts.
This is a clear indication that inflation and the energy crisis are having a concrete impact on the Euro economies.
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.
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.
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.
A recent survey conducted in the EU found that 93% of EU citizens consider the rising cost of living the "most pressing worry."
Read more: Eurozone economy set to shrink in 2023 due to high inflation: Reports
Carried out by the Kantar data analytics company for the European Parliament, the survey said that "the rising cost of living is the most pressing worry for 93% of Europeans," indicating that "in every EU Member State, more than seven in ten respondents are worried about the rising cost of living, with peak results in Greece (100%), Cyprus (99%), Italy and Portugal (both 98%)."
Meanwhile, a poll conducted days earlier by the Századvég Foundation revealed that four in five Europeans believe the European Commission is partly responsible for triggering the energy crisis that swept Europe, for more than a year now.
About 79% of the 38,000 participants in the survey, which was conducted between October 13 to December 7, believe that the Commission had a role in the energy price surge, up from 75% in early 2022.
On the other hand, 21% disapproved that the Commission had a role, in comparison to 25% sampled between January 3 and February 14 of last year.
