The World Bank warns of a slowdown in global growth, increasing inequality | World Bank News

Throughout the coronavirus epidemic, the bank has been critical of international inequalities – and in recent times.

The global economy enters a period of “marked decline,” the World Bank warned on Tuesday, as Omicron’s coronavirus variation, as well as the triple rise in inflation, rising government debt and economic growth threaten the return of emerging economies. . metal.

Recent Global Economic Prospects Report (PDF) from the World Bank sees global economic growth drop from 5.5 percent in 2021 to 4.1 percent in 2022 – an expectation that is more optimistic than June’s demand for 4.3 percent growth this year.

Throughout the epidemic, the bank said raised the alarm about the growing inequality between countries and countries – and how it appears in the near future.

In the developing world, many governments have little or no control over what might happen to them. Meanwhile, the rise in prices of stocks and real estate continues to make the rich richer while increasing inflation which has a huge impact on low-income households.

Moreover, in contrast to most developed countries, developing and emerging nations have less economic pressures to allow inflation to keep warm. Many have already raised interest rates several times to reduce inflation, but that tool also revives economic activity. Consequences: raising borrowing increases the likelihood that both developing and developing countries will experience “crisis” – when economic activity returns to normal as a result of a collision, and only significantly slows it down.

“These increasing economic disparities are particularly troubling because of the potential for social instability in developing countries,” the bank warned.

The growth of inequality is exacerbated by growing uncertainty as Omicron’s disease spreads rapidly, the bank said, disrupting economic activities that are already hampered by domestic crises.

Such needs are leaving the poorest countries “the last in the world to trade” the bank said, as countries with deep pockets prevent them from buying the goods they need.

The report states: “Lack of productivity and fluctuations in prices, as well as” climate change due to climate change increases the risk of food insecurity, increasing health and nutrition, “says the report.

Different types of size

The World Bank predicts significant gaps between developed and relatively wealthy countries.

Wealthier nations are expected to see a 5% drop in spending last year to 3.8 percent this year and 2.3 percent in 2023 – a speed that the bank said would “be enough to repatriate pre-epidemic outputs.”

For both emerging and developing countries, by contrast, the bank is looking to increase from 6.3 percent last year to 4.6 percent this year, and 4.4 percent in 2023 – leaving economic growth in those countries by 4 percent below the previous epidemic. .

“For the most vulnerable economies, the recovery rate is growing,” the bank said, noting that “the fragile and volatile economy will be 7.5 percent lower than in the past, and the output of smaller islands will be 8.5 percent lower.”

As previously mentioned, the bank is continuing to call on countries to prioritize coronavirus vaccines to end the epidemic.

“Vaccination is on the rise, but new forms and restrictions on immunization are still major barriers, leading to further health uncertainties,” the report said.

The World Bank continues to press for more aid in low-income countries.