Global growth is projected to decelerate sharply this year, to its third weakest pace in nearly three decades, overshadowed only by the 2009 and 2020 global recessions.
London, 13 Jan 2023 – The report’s foreword is yet discomforting: “The crisis facing development is intensifying. Our latest forecasts indicate a sharp, long-lasting slowdown, with global growth declining to 1.7 percent in 2023 from 3.0 percent expected just six months ago.“
Both Advanced Economies and developing countries (EMDE – Emerging markets and developing economies) are facing a grim economic future, but the news is that this gray outlook will last beyond 2024. The post Covid pandemic recovery has been dramatically hampered by the war in Ukraine which impact is global.
We singled out from a series of World Bank Prospect 2023 the one we consider the scariest as it traces a long term trend of ‘deviation of output’ as production itself has changed driven by the post-pandemic crisis, population impoverishment and necessary change of product delivery channels, until the war in Ukraine and the imposition of a dramatic diversion of energy sources and production both in location and type with acceleration of renewables.
Growth in advanced economies is projected to slow sharply in 2023 to 0.5 percent as central banks continue to tighten monetary policy to contain inflationary pressures.
“US, Euro Area, Japan (Advanced economies) are projected to slow from 2.5% in 2022 to 0.5% in 2023: over the past two decades slowdowns of this scale have foreshadowed a global recession” said World Bank President David Malpass.
United States, growth is forecast this year to fall to 0.5%, this means 1.9 percentage points below previous forecasts with the weakest performance outside of official recessions since 1970.
We can figure out a 2024 and probably 2025 on the same downward path with the poorest having to bear the heavy burden of a crisis they have no fault or responsibility at all for. The poor not just in the geographical sense but also in the structural and social one as the low income of the advanced economies becoming increasingly poorer:
“The international community needs to intensify its support to large numbers of displaced people and others affected by conflict or food insecurity, particularly in Low-Income Countries. – says the outlook – In responding to food and energy shocks, governments need to avoid imposing export restrictions and instead attenuate the impact on the poor through support measures targeted at low-income groups.”