Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality
Washington, U.S. | Xinhua | The global economy is on track to grow by 2.9 percent in 2022, down 1.2 percentage points from the January projection, the World Bank Group said in its latest Global Economic Prospects released on Tuesday, warning of stagflation risk.
Compounding the damage from the COVID-19 pandemic, the Russia-Ukraine war has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, the report said.
This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike, according to the report.
Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022 and hover around that pace over 2023-2024, the report showed.
Growth in advanced economies is projected to sharply decelerate from 5.1 percent in 2021 to 2.6 percent in 2022.
Among emerging market and developing economies, growth is also projected to fall from 6.6 percent in 2021 to 3.4 percent in 2022 — well below the annual average of 4.8 percent over 2011-2019.
World Bank President David Malpass said that for many countries, recession will be hard to avoid, adding that it is urgent to encourage production and avoid trade restrictions.
“Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality,” Malpass said.