World Bank slashes global growth forecast and warns about growing inequality

• The World Bank slashed its global growth forecast on Tuesday and cautioned that a rise in inflation, debt and income inequality could jeopardize the recovery in emerging and developing economies.
• Global growth is expected to slow to 4.1% in 2022 and 3.2% in 2023 as more nations start unwinding unprecedented levels of fiscal and monetary policy support, the bank said in its latest “Global Economic Prospects” report.
• Growth in China is set to ease to 5.1% this year, partly due to the lingering effects of the pandemic as well as additional regulatory tightening from Beijing, according to the report.

The World Bank slashed its global growth forecast for 2022 and 2023, and cautioned that a rise in inflation, debt and income inequality could jeopardize the recovery in emerging and developing economies.

Global growth is expected to slow to 4.1% in 2022 and 3.2% in 2023 as more nations start unwinding unprecedented levels of fiscal and monetary policy support to tackle the fallout from the coronavirus pandemic, the bank said in its “Global Economic Prospects” report on Tuesday.

The projections follow a strong rebound in global growth as demand soared after Covid-related lockdowns lifted. The World Bank estimated that the world economy grew 5.5% in 2021.

Major economies including the United States, China and countries in the euro zone are expected to slow down this year, the bank said. It added that a resurgence in Covid infections, due to the highly contagious omicron variant, will likely disrupt economic activity in the near term and could worsen growth projections if it persists.