Economics & Finance

World Bank 2023 forecast: Global economy is slowing close to a recession

The world economy is slowing “perilously close” to a recession, the World Bank warned Tuesday, slashing its 2023 global growth forecast, as the impact of central bank rate hikes intensifies, Russia’s war in Ukraine continues and the world’s major economic engines sputter.

In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth this year by nearly half to just 1.7%. In its previous Global Economic Prospects report in June 2022, the lender had forecast 2023 global growth at 3%.

If the latest forecast that points to a “sharp, long-lasting slowdown” proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.

“Given fragile economic conditions, any new adverse development … could push the global economy into recession,” the Washington-based development lender said. These include higher-than-expected inflation, sudden spikes in interest rates to contain price increases, a pandemic resurgence or escalating geopolitical tensions.

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