WASHINGTON, June 7 ------ The global economy is likely to slow this year, hobbled by high interest rates, repercussions of Russia's invasion of Ukraine and the lingering effects of the coronavirus pandemic.
That's the latest outlook of the World Bank, a 189-country anti-poverty agency. World Bank estimates that the international economy will expand by only 2.1% in 2023 after growing 3% in 2022. Despite that forecast, the bank’s latest Global Economic Prospects report, which it issued Tuesday, marks an upgrade from its previous forecast in January. That estimate had envisioned worldwide growth of 1.7% this year.
The Federal Reserve and other major central banks have been raising interest rates to combat a resurgence of inflation, set off by a stronger-than-expected rebound from the pandemic recession, persistent supply shortages and energy and food price shocks caused by the Ukraine war. But the global economy has proved surprisingly resilient in the face of higher borrowing costs, and the World Bank predicts that growth will accelerate to 2.4% in 2024.
In its report Tuesday, the World Bank upgraded its forecast for U.S. economic growth this year to 1.1%. Although weak, that is more than double the growth the World Bank had envisioned in January. World Bank upgraded its 2023 outlook for China after Beijing late last year relaxed its zero-COVID policies, which had restricted travel and hammered its economy. The world’s second-biggest economy is now expected to grow 5.6% in 2023, up from 3% last year. The bank predicts that global trade will slow markedly this year. It foresees a sharp drop in the price of energy and other commodities in 2023 and 2024.
Source: newsnetmedia.com
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