War, food shortages and possible “stagflation”; the dark prospects for the global economy

The World Bank downgraded its outlook for the global economy, highlighting Russia’s war against Ukraine, the prospect of food shortages, and fears about the possible return of the “stagflation”a toxic mixture of high inflation and low growth hadn’t been seen for four decades.

The agency for the fight against poverty of 189 member countries forecasts Tuesday that the global economy will grow by 2.9% this yearCompared to him 5.7% global 2021 and forecast of 4.1% for 2022 in January.

“For many countries, the recession will be difficult to avoid,” said World Bank President David Malpass.

The bank does not foresee better prospects for 2023 and 2024: it expects global growth of 3% for the two-year period.

• United States and euro zone

For UNITED STATES OF AMERICA, The WB lowered its growth forecast to 2.5% this year after 5.7% in 2021 and the 3.7% forecast in January. For the 19 European countries that use the euro, forecast lowered to 2.5% this year compared to 5.4% last year and 4.2% expected in January.

• China

In China, the second largest economy in the world after the United States, the World Bank expects growth of 4.3%, compared to 8.1% last year. China’s zero COVID policy, which includes draconian blockades in Shanghai and other cities, has stalled economic activity. The Chinese government is providing aid to alleviate the situation.

• Developing countries

For emerging markets and developing countries, we collectively anticipate growth of 3.4% in the year, compared to 6.6% in 2021.

The Russian invasion of Ukraine caused severe disruptions in the world trade in energy and wheat, hitting a global economy that was recovering strongly from the coronavirus pandemic. Already high commodity prices have risen further, threatening the availability of affordable food in poor countries.

“There are a serious risk of malnutritionof growing hunger and even famine, “Malpass warned.

The World Bank predicts that the price of oil will rise by 42% this year and that of non-energy commodities will rise by nearly 18%. Instead, it predicts that oil and other commodity prices will drop 8% in 2023. It compared the current rise in energy and food prices to the oil shock of the 1970s.

Associated Press

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