December 27, (THEWILL) – After about a year of uncertainty in 2022, the global economy is in a steep slowdown, according to the latest report by the World Bank.
Education losses, global inflation, disruptions in supply chains, and other global challenges remind us that the effects of the COVID-19 pandemic continue to linger, it said.
While speaking about growth in its report, 2022 in Nine Charts, it said, “The global economy is now in its steepest slowdown following a post-recession recovery since 1970 – with global consumer confidence already suffering a much sharper decline than during the run-up to previous global recessions.
“The world’s three largest economies—the United States, China, and the Euro area—have been sharply slowing. Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession.”
The World Bank in its report also said that an increase in the severity of natural hazards continues to illuminate the social and economic impacts of climate change.
Stating that 2022 was marked by a drastic rise in food insecurity around the globe, the report said, the war in Ukraine, high inflation, supply chain disruptions, and the global economic downturn all combined to drive large price increases for many agricultural products and inputs, such as fertilizers.
The report states that the Covid-19 pandemic dealt the largest setback to global poverty reduction efforts in decades, and the recovery has been highly uneven.
“By the end of 2022, as many as 685 million people could be living in extreme poverty—making 2022 the second-worst year for poverty reduction in the past two decades (after 2020),” it said.
It also stated that the past year saw the debt crisis facing developing countries intensify with some 60 percent of the world’s poorest countries either in debt distress or at risk of it.
Earlier, the World Bank slashed its China growth forecast for the year as the pandemic and weaknesses in the property sector hit the world’s second-largest economy.
In an official statement, the World Bank said it slashed its forecast to 2.7% from the 4.3% predicted in June. It also revised its forecast for next year from 8.1% down to 4.3%.
The slowdown in China comes as the global economy is battered by surging interest rates aimed at fighting runaway inflation that has been triggered by Russia’s war in Ukraine as well as global supply chain snarls.