By Joshua Manning • 07 June 2022 • 18:18
World Bank warns world economy in danger as "stagflation risk rises"
Credit: Creative Commons
Speaking on the danger the world economy faces in the foreword of the report, the World Bank Group President David Malpass stated:
“Just over two years after COVID-19 caused the deepest global recession since World War II, the world economy is again in danger. This time it is facing high inflation and slow growth at the same time. Even if a global recession is averted, the pain of stagflation could persist for several years— unless major supply increases are set in motion.”
“Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely, with potentially destabilizing consequences for low- and middle-income economies.”
“It’s a phenomenon—stagflation—that the world has not seen since the 1970s.”
“Our forecasts reflect a sizable downgrade to the outlook: global growth is expected to slow sharply from 5.7 per cent in 2021 to 2.9 per cent this year. This also reflects a nearly one-third cut to our January 2022 forecast for this year of 4.1 per cent.”
“The surge in energy and food prices, along with the supply and trade disruptions triggered by the war in Ukraine and the necessary interest rate normalisation now underway, account for most of the downgrade.”
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Originally from the UK, Joshua is based on the Costa Blanca and is a web reporter for the Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]
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