Prompt the World Bank: Global economy could enter recession

In the World Bank's annual report, which provides loans for development projects in the poorest countries, it is said to have almost halved its forecast for global growth this year from initially projected 3%, currently at 1.7%.

If this prediction proved accurate, it would be the third worst annual increase in three decades, in line with deep recession resulting from the 2008 global financial crisis and the coronary pandemic in 2020.

Although the United States can avoid recession this year, the World Bank predicts there will be an increase of 0.5%. Global weakness will constitute another argument for American businesses and consumers, currently facing high prices and high interest rates.

The United States also continues to be endangered by further interruptions that could be in the supply chain if the COVID-19 continues to spread, or whether war in Ukraine is exacerbated.

Europe, a leading exporter towards China, will suffer the consequences of a weaker Chinese economy.

The World Bank report also notes that increasing interest rates in developed economies, both in the United States and Europe, will ward off investment capital for the poorest countries, damaging the countries' vital interests.

The report says that at the same time high interest rates will slow growth in developed countries, at a time when Russia's aggression in Ukraine has affected rising food prices worldwide.

Russia's “Sulmi in Ukraine has increased new major costs”, World Bank President David Malpas said during a call to reporters. “Perspective is particularly devastating for many of the poorest economies, where the smoothing of poverty has already stopped and access to electricity, chemical waste, food and capital are expected to continue to be limited to an extended”.

The effects of a global decline would be particularly severe for the poorest countries in regions such as Saharan Africa, where about 60% of the world's poor are located. The World Bank predicts that per capita income will increase by only 1.2% in 2023 and 2024, a poor level that can increase the poverty level.

<x) Facing the size of these challenges will require more and more significant sources for development and global public supplies”.

Mr. Malpas said that along with efforts to find new funding so as to provide more loans to poor countries, the World Bank is also trying to improve loan conditions, thus increasing the transparency of loans “in particular for that part of the poor countries that find themselves in a stable debt situation”.

The report comes after a similar pessimistic forecast made a week ago by Kristina Georgieva, the director of the International Monetary Fund, which functions as the global credit agency. Speaking of the CBS Channel's “Face show, Mrs. Georgieva estimated that one-third of the world would fall into recession this year.

For most of the world's economy, this will be a difficult year, more severe than the year after we left”, said Mrs. Georgieva. “Why? Because the three largest economies -- the U.S., the EU, China -- are slowing down at the same time”.

The World Bank predicts that the European Union economy will not grow at all next year, as there was an increase of 3.3% in 2022. The report predicts China's economy will grow by 4.3% -- nearly a percentage point less from the initial forecast and almost half the level Beijing had released in 2021.

The World Bank thinks that developing countries will do better, increasing by 3.4% this year, the same level as 2022, although it will be only about half the growth of 2021. The growth of Brazil's economy will drop to 0.8% in 2023, while last year was at 3%. Pakistan's economy is expected to grow by 2% this year, as much as a third of last year's growth.

Other economies have also made grim predictions, though most of them are not so dark. Economists in Bank JPMorgan predicts a slow growth this year for advanced economies and the world as a whole, but do not think there will be a recession. Last month, the bank predicted that slowing inflation would increase consumers' ability to spend and strengthen growth in the United States and other countries.

Global growth will drop, but will not stop”, says the bank report JPMorgan. /VOA