VINACHEM

The World Bank cut its 2023 global GDP growth forecast to 1.7% from a previous projection of 3%, marking a sharp slowdown from the estimated 2.9% growth for 2022.

“Global growth has slowed to the extent that the global economy is perilously close to falling into recession – defined as a contraction in annual global per capita income – only three years after emerging from the pandemic-induced recession of 2020,” the multilateral institution said in its Global Economic Prospects report.

The projected growth this year is the slowest outside the 2009 and 2020 recessions since 1993 and reflects “synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from the Russian Federation’s invasion of Ukraine”, it said.

The US, Europe, and China – the word’s three major engines of growth – are all undergoing a period of pronounced weakness, and the resulting spillovers are exacerbating other headwinds faced by emerging market and developing economies, the World Bank said.

“Further negative shocks – such as higher inflation, even tighter policy, financial stress, deeper weakness in major economies, or rising geopolitical tensions – could push the global economy into recession,” it added.   – ICIS –