The World Bank has warned that “even a moderate hit” could tip the global economy into recession in 2023.
The global financial institution made this known it’s recently published 2022 review, saying that the global economy is in its steepest slowdown since 1970 and that “consumer confidence (is) already suffering a much sharper decline than during the run-up to previous global recessions.”
The report also noted that, “the world’s three largest economies – the United States, China, and the euro area – have been sharply slowing. Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession.”
The 2022 global economy has witnessed a restrictive monetary environment, with central banks across the globe insisting on going on with measures to rein in post-COVID inflation at any cost.
The World Bank report highlighted the lingering impacts of COVID-19 on the survival of especially citizens of poor countries, saying the pandemic “dealt the largest setback to global poverty reduction efforts in decades” even as the recovery has been largely two-track.
The report also noted that, “by the end of 2022, as many as 685 million people could be living in extreme poverty — making 2022 the second-worst year for poverty reduction in the past two decades (after 2020).
“In addition to the lingering effects of the pandemic, rising food and energy prices – fueled by climate shocks and conflicts such as the war in Ukraine – have hindered a swift recovery. It is now projected that seven per cent of the world’s population – roughly 574 million people – will still struggle in extreme poverty in 2030 – far short of the global goal of three per cent in 2030.”
Debt servicing was one of the most debilitating crises the global community has had to contend with, according to the world bank.
It noted that 2022 has seen the debt crisis facing developing countries intensified, with 60% of the poorest countries either in debt distress or at risk one.
“Overall debt levels have increased for developing countries over the past decade, with some 60 per cent of the world’s poorest countries either in debt distress or at risk of it.
“Over-encumbered with debt, the world’s poorest are not able to make critical investments in economic reform, health, climate action, or education – among other key development priorities. Perhap more significantly, the composition of debt has changed dramatically since 2010, with private creditors playing an increasingly larger role,” it noted.
