AUS
NZ
UK
CA
USA
IND
Highlights
- Economic growth would fall in 2022 and 2023, according to the World Bank’s recent Global Economic Prospects
- The GDP fall this year is mainly because of the rise in COVID-19 cases across countries due to the spread of the new variant.
- Looking at the forecasts by the World Bank, it seems that the GDP growth gap is going to widen between the rich nations and the emerging economies.
The global economic growth signifies the lump sum growth of all the countries collectively. To fight back the evils such as global hunger and poverty; the world needs equitable global economic growth. However, it is unfortunate that the economic growth would fall in 2022 and 2023, according to the World Bank’s recent Global Economic Prospects report.
Economic slowdown in 2022
The global economy was doing substantially better as the year 2021 was coming to an end; there were high expectations for recovery in 2022 as well. However, the World Bank has indicated that this year is going to experience a significant economic slowdown.
According to the Global Economic Prospects report, Global GDP would decrease from 5.5% in 2021 to 4.1% in 2022. To make matters worse, the forecast for 2023 is even worse. The World Bank expects the global GDP to further decelerate to 3.2% in 2023.
GOOD READ: Major construction company bites the dust, home buyers left in lurch
The GDP fall this year is mainly because of the rise in COVID-19 cases across countries due to the spread of the new variant. Additionally, mounting high inflation, rising debt, and widening income inequality are the other primary reasons for the slowdown.
The loop is dangerous. Due to the high transmission of Omicron variant, cases are rising significantly because of which economic activity would be soon drastically disturbed. And, thus more pressure will mount up on already distorted supply-chains.
Besides, the emerging economies are likely to suffer more. Why? Because of economic slowdown in countries like the US and China, meeting external demand in emerging and developing nations would be difficult. The emerging nations are already grinding under high public debt and there is a lack of policy making space to deal with new COVID outbreaks, inflation and supply bottlenecks.
Now, looking at the forecasts by the World Bank, it seems that the GDP growth gap is going to widen up between the rich nations and the emerging economies. According to the World Bank, rich nations would be able to recover their GDP growth as the pre-pandemic times by the end of 2023. However, emerging nations would face an issue. Especially the vulnerable nations, which will be around 7% below their pre-pandemic level.
ALSO READ: What challenges await Australia's travel sector in 2022?
Bottom line
The year 2022 may not be an easy slope for the world economy, and especially for the developing nations. However, according to the World Bank, “concerted international action” and “comprehensive set of national policy responses” may help to ease the crises.
