World Bank on Global Economic prospects

Published on January 12, 2023
Current Context: The newest Global Economic Prospects report from the World Bank details a slowdown in global growth as a result of several issues, including increased inflation, higher interest rates, less investment, and interruptions brought on by Russia's invasion of Ukraine.
World Bank on Global Economic prospects
  • According to the report, any further unfavorable events, such as a resurgence of the COVID-19 pandemic or rising geopolitical tensions, could cause the global economy to contract, which would be the first time in more than 80 years that two recessions of this magnitude have occurred within the same decade.
  • The analysis predicts that the global economy will expand by 1.7% in 2023 and 2.7% in 2024. The growth slowdown is anticipated to be widespread, with predictions for 2023 being revised downward for approximately 70% of emerging and developing economies and 95% of advanced economies.
  • The average per-capita income growth in emerging markets and developing nations is anticipated to be 2.8% during the next two years, which is one full percentage point less than the average for the period from 2010 to 2019.
  • The paper emphasizes how the development dilemma is getting worse as the prognosis for world growth gets worse. The poor growth that emerging and developing nations have been experiencing for several years is being caused by their high debt loads and low investment.
  • It is estimated that growth in per capita income in Sub-Saharan Africa, which is home to nearly 60% of the world's extreme poor, will average just 1.2% from 2023 to 2024. At this rate, poverty rates may increase rather than decline.
  • Advanced economies:
    • It is predicted that growth in advanced economies will decrease from 2.5% in 2022 to 0.5% in 2023. Slowdowns of this size have predicted a worldwide recession over the past 20 years.
    • The United States is expected to experience its worst growth outside formal recessions since 1970 in 2023 when it is predicted to drop to 0.5%. Growth in the Eurozone is predicted to be zero percent in 2023, while growth in China is predicted to be 4.3%.
  • Developing economies:
    • With China excluded, it is anticipated that growth in emerging markets and developing economies will slow from 3.8% in 2022 to 2.7% in 2023, reflecting significantly lower external demand that high inflation, currency depreciation, tighter financing conditions, and other domestic headwinds will exacerbate.
    • The GDP levels in emerging and developing economies will be about 6% below what was anticipated before the epidemic by the end of 2024.
  • Growth in investments
    • An in-depth analysis of the medium-term prospects for investment growth in developing and emerging market economies is also provided in the research. Gross investment in these economies is predicted to expand by an average of 3.5% between 2022 and 2024, which is less than half the rate seen over the previous two decades.

Question: 

Q.1 Who releases the Global Economic prospects report?
a. World Bank

b. IMF
c. US Financial Department
d. Both 1 and 2

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