- In 2022, the Europe and Central Asia economy is predicted to contract by 2.9 percent before increasing by 1.5 percent in 2023.
- East Asia and Pacific is expected to slow to 4.4 percent before picking up to 5.2 percent in 2023.
- Latin America and the Caribbean is expected to slow to 2.5 percent, then 1.9 percent in 2023.
- Middle East and North Africa is expected to reach 5.3 percent before dropping to 3.6 percent in 2023.
- South Asia: In 2022 and 2023, growth is expected to drop to 6.8% and 5.8%, respectively
According to the World Bank, global growth is slowing and risk of stagflation is rising . From 5.7 percent in 2021 to 2.9 percent in 2022, global growth is predicted to slow. The rate of decline is much lower than the 4.1 percent predicted in January. Over the years 2023-24, it is predicted to maintain that pace. As a result of the virus and the conflict, per capita GDP in developing economies will be roughly 5% lower this year than it was before the pandemic. Pent-up demand is waning due to causes such as the war in Ukraine, which is disrupting economic operations and delaying investment and trade, while fiscal and monetary policy accommodation is being eliminated.
The current global economic situation is comparable to the 1970s stagflation. According to the report, three key aspects of the current situation resemble those of the 1970s: persistent supply-side disruptions fuelling inflation, prospects for weakening growth, and vulnerabilities that emerging market and developing economies face in terms of the monetary policy tightening that will be required to rein in inflation.
However, unlike 1970, the dollar is strong, commodity price rises are smaller in percentage, and major financial institutions’ balance sheets are generally healthy. More crucially, unlike in the 1970s, central banks in advanced and developing economies today have unambiguous price-stabilization missions.
Central banks have a proven track record of meeting their inflation targets over the last three decades.
Europe and Central Asia: In 2022, the regional economy is predicted to contract by 2.9 percent before increasing by 1.5 percent in 2023.
East Asia and Pacific: In 2022, growth is expected to slow to 4.4 percent before picking up to 5.2 percent in 2023.
Latin America and the Caribbean: In 2022, growth is expected to slow to 2.5 percent, then 1.9 percent in 2023.
Middle East and North Africa: In 2022, growth is expected to reach 5.3 percent before dropping to 3.6 percent in 2023.
South Asia: In 2022 and 2023, growth is expected to drop to 6.8% and 5.8%, respectively.
Earlier, The International Monetary Fund has also expected global economic growth to be slower in 2022 as the fallout from Ukraine’s conflict spreads throughout the world.
According to the IMF, the global economy will grow by 3.6 percent this year, down from 6.1 percent last year.
Galactik Views