World Bank warning: Global economy is at risk of recession

The global economy will come perilously close to a recession this year led by weaker growth in all the worlds top economies the United States Europe and China the World Bank warned on TuesdayIn an annual report the World Bank which lends money to poorer countries for development projects said it had slashed its forecast for global growth this year by nearly half to just 17 per cent from its previous projection of 3 per centIf that forecast proves accurate it would be the thirdweakest annual expansion in three decades behind only the deep recessions that resulted from the 2008 global financial crisis and the pandemic in 2020Though the United States might avoid a recession this year the World Bank predicts the US economy will eke out growth of 05 per cent global weakness will likely pose another headwind for Americas businesses and consumers on top of high prices and more expensive borrowing ratesThe United States also remains vulnerable to further supply chain disruptions if Covid keeps surging or the war in Ukraine worsens And Europe long a major exporter to China will likely suffer from a weaker Chinese economyThe World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries thereby depriving them of crucial domestic investmentAt the same time the report said those high interest rates will slow growth in developed countries at a time when Russias invasion of Ukraine has kept world food prices highAlso read Healthcare costs push over half a billion into extreme poverty WHO World Bank reportsThe impact of a global downturn would fall particularly hard on poorer countries in such areas as Saharan Africa where the World Bank predicts per capita income will grow just 12 per cent in 2023 and 2024 That is such a tepid pace that poverty rates could riseWeakness in growth and business investment will compound the already devastating reversals in education health poverty and infrastructure and the increasing demands from climate change said David Malpass president of the World BankThe report follows a similarly gloomy forecast a week earlier from Kristina Georgieva the head of the International Monetary Fund the global lending agency Georgieva estimated on CBS iquestFace the Nationiquest that onethird of the world will fall into recession this yearFor most of the world economy this is going to be a tough year tougher than the year we leave behind Georgieva said Why Because the three big economies US EU China are all slowing down simultaneouslyThe World Bank projects that the European Unions economy wont grow at all next year after having expanded 33 per cent in 2022 It foresees China growing 43 per cent nearly a percentage point lower than it had previously forecast and about half the pace that Beijing posted in 2021The bank expects developing countries to fare better growing 34 per cent this year the same as in 2022 though still only about half the pace of 2021 It forecasts Brazils growth slowing to 08 per cent in 2023 down from 3 per cent last yearIn Pakistan it expects the economy to expand just 2 per cent this year onethird of last years pace Other economists have also issued bleak outlooks though most of them not quite as dire Economists at JPMorgan are predicting slow growth this year for advanced economies and the world as a whole but they dont expect a global recessionLast month the bank predicted that slowing inflation will bolster consumers ability to spend and power growth in the United States and elsewhereThe global expansion will turn into 2023 bent but not broken the JP Morgan report saidThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever