World Bank lowers 2022 global growth forecast to 2.9% from 4.1% in January

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The ongoing Russian invasion of Ukraine has dealt a major blow to the world economy and the resulting food crisis and damage to the supply chain has also deeply impacted its growth. The adverse impact of the ongoing invasion was clear once again on Wednesday as the World Bank cut its global growth forecast by 1.2 percentage points down to 2.9% for 2022. According to the report published by the institution, this was a result of both the ongoing Russia-Ukraine conflict and the impact from the COVID-19 pandemic that was detrimental to a lot of economies around the world.

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The Global Economic Prospects report stated that the world economy was already struggling from the aftermath of the pandemic and with the Russian invasion making things worse, the global economy is currently headed towards “a protracted period of feeble growth and elevated inflation”.

“The danger of stagflation is considerable today. Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer,” World Bank President David Malpass wrote in the report.

Also read | Russia walks out of Security Council meeting after EU blames Kremlin for looming food crisis

This is the worst growth rate seen in the global economy since the 1970s and by 2024, the pace of global growth is projected to slow by 2.7 percentage points – two times the rate in the late 1970s.

The only winners in the current situation are predicted to be the commodity exporters who can take advantage of the high energy prices, according to the report by the World Bank.

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