World Bank: Sharp and prolonged slowdown in growth will hit developing countries hard

Globally, growth continues to slow sharply due to rising inflation and interest rates, investment cuts and supply disruptions caused by Russia’s full-scale invasion of Ukraine.

Any new adverse event could further push the global economy into recession, the World Bank said. This includes higher-than-expected inflation, sharp increases in interest rates to contain it, a resurgence COVID-19 pandemic or escalation of geopolitical tensions.

Yet, faced with extremely high levels of public debt and rising interest rates, advanced economies are absorbing global capital.

Poverty will rise

Growth in per capita income in emerging market and developing economies projected at an average of 2.8 percentwhich is a full percentage point lower than the 2010-2019 average.

In sub-Saharan Africa, which account for about 60 percent of the world’s population living in extreme povertyGrowth in per capita income is expected to average only 1.2 percent in 2023-24, which could lead to growth rather than reduction in poverty.

crisis facing development intensifies as global growth prospects deteriorate“said World Bank Group President David Malpass.

“Emerging market and developing economies are facing a multi-year period of slow growth driven by heavy debt burdens and weak business investment. This will exacerbate already devastating changes in education, health care, poverty and infrastructure, as well as growing needs due to climate change.”

Global recession predicted

The report predicts that growth in advanced economies will slow from 2.5% in 2022 to 0.5% in 2023.. Over the past two decades, a slowdown of this magnitude heralded a global recession.

in United StatesGrowth is forecast to slow to 0.5% this year, 1.9 percentage points below previous forecasts and the weakest outside of an official recession since 1970.

In 2023 Eurozone Growth Expected at 0% – downward revision by 1.9 p.p. AT China, growth is projected at 4.3%; 0.9 percentage points below previous forecasts.

With the exception of China, growth in emerging market and developing economies is expected to slow down from 3.8% in 2022 to 2.7% in 2023.

By the end of 2024, GDP in emerging market and developing economies will be around six percent below the expected level before the pandemic.

Between 2022 and 2024, gross investment in these countries is likely to grow by around 3.5 percent on average. half as much as in the previous two decades.

Sustainable fishing improves living conditions in Haiti.

Latin America and the Caribbean

Meanwhile, figures from the United Nations’ latest flagship annual report for exports of goods from Latin America and the Caribbean show a 20 percent growth in 2022, but a slowdown compared to the previous year.

The Economic Commission for Latin America and the Caribbean (ECLAC) believes that growth was driven by 14% price increase and a 6 percent increase in exports.

The Commission also found that the value of imports of regional goods increased by 24 percent.

As in 2021, growth was driven mainly by external factors (rising commodity prices, especially fuel), rather than opportunities to increase exports or diversify regional exports into new sectors.

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