Even without another crisis, global growth this year “is expected to decelerate sharply, reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine,” the World Bank said.
Global Economy in 2023 | Annual change in gross domestic product
“Urgent global and national efforts” are needed to mitigate the risk of such a downturn as well as debt distress in emerging market and developing economies (EMDEs), where investment growth is expected to remain below the average of the past two decades, the Washington-based lender said.
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“It is critical that EMDE policy makers ensure that any fiscal support is focused on vulnerable groups, that inflation expectations remain well anchored, and that financial systems continue to be resilient,” it said.
Similar demands have been made by central bankers from around the world as they aggressively raise interest rates to ease price pressures while governments support businesses and households by containing energy costs.
International Monetary Fund Managing Director Kristalina Georgieva started 2023 with a warning that the world faces “a tough year, tougher than the year we leave behind.” One-third of the global economy will be in recession because the US, the EU and China are all slowing down simultaneously, she told CBS’s ‘Face the Nation’ in an interview aired Jan. 1.
