A second global recession for this decade is looming, the World Bank has warned, as it lowered growth forecasts for almost all advanced economies this year and next.
In its latest Global Economic Prospects publication the institution said it now expects global GDP growth of 1.7% in 2023, and 2.7% in 2024, down from a previous forecast of 3% for both years.
Growth forecasts for 2023 in the US were cut to 0.5% while euro-area GDP growth is put at 0%, a downward revision in both cases of 1.9 percentage points.
In China, growth is projected at 4.3% in 2023, 0.9 percentage point below previous forecasts.
David Malpass, president of the World Bank, said Russia's war in Ukraine, stubbornly high inflation and global interest rate rises threatened to add to the "already devastating" legacy of Covid and resulting global lockdowns.
“This would mark the first time in more than 80 years that two global recessions have occurred within the same decade,” the World Bank publication concluded.
Sharp slowdowns in the US, eurozone and China were blamed for the downgrades as the bank slashed its growth forecasts for nearly all advanced economies and almost 70% of developing markets.
Growth in advanced economies is 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," the World Bank pointed out.
"The crisis facing development is intensifying as the global growth outlook deteriorates,” added Malpass. "Weakness in growth and business investment will compound the already-devastating reversals in education, health, poverty, and infrastructure and the increasing demands from climate change."