The World Bank has said that in 2023, disinflationary monetary policy is expected to bite, with global output growing by just 2.9 percent.
The risks to the outlook are overwhelmingly tilted to the downside, the World Bank said.
It added that the war in Ukraine could lead to a sudden stop of European gas imports from Russia; inflation could be harder to bring down than anticipated either if labor markets are tighter than expected or inflation expectations unanchor; tighter global financial conditions could induce debt distress in emerging market and developing economies; renewed COVID-19 outbreaks and lockdowns as well as a further escalation of the property sector crisis might further suppress Chinese growth, and geopolitical fragmentation could impede global trade and cooperation.
“A plausible alternative scenario in which risks materialize, inflation rises further, and global growth declines to about 2.6 percent and 2 percent in 2022 and 2023, respectively, would put growth in the bottom 10 percent of outcomes since 1970,” it said in its updated World Economic Outlook report.
With increasing prices continuing to squeeze living standards worldwide, the World Bank stated, that taming inflation should be the priority for policymakers.
Bainamultimedia
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