Global economic expansion will slow significantly in 2023 and 2024, according to a World Bank report released on Tuesday.
“The global economy is in a precarious situation.” Said Indermit Gill, Chief Economist and Senior Vice President of the World Bank Group, said: The agency expects global growth to slow from 3.1% in 2022 to 2.1% in 2023. according to To the World Bank’s Global Economic Outlook report. (Related: World Bank President Warns We Could Head for Global Recession)
Climate activists protest outside World Bank headquarters during the Spring Meetings of the World Bank Group and the International Monetary Fund in Washington, DC, April 14, 2023, urging the World Bank to stop financing fossil fuels. asked. (Photo credit: MANDEL NGAN/AFP via Getty Images)
According to the report, the U.S. economy is expected to grow 1.1% in 2023 and slow to 0.8% in 2024, mainly due to the impact of continued interest rate hikes from March 2022 onwards. The report also notes that US interest rates are having a negative impact on emerging market and developing economies, increasing the likelihood of a financial crisis.
The World Bank expects global trade growth to slow to 1.7% in 2023 from 6% in 2022, according to the report.
The volatile global economy is now coping with “the long-lasting effects of the overlapping negative shocks of the pandemic, the Russian Federation’s invasion of Ukraine, and a sharp tightening of monetary policy to curb high inflation,” according to the report’s summary. It is said that
“Recent banking sector stress in advanced economies is also likely to slow banking activity through tougher credit conditions,” the report continues. “Further bank turmoil could lead to monetary policy tightening, further slowing global growth.”
Three major U.S. banks—Silicon Valley Bank, Signature Bank and First Republic Bank—have failed since March.
The US economy slowed to an annual growth rate of 1.3% in the first quarter of 2023. according to Revised GDP statistics released by the Bureau of Economic Analysis (BEA) in May.
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