World Bank Alerts of a Sharp Decline in Global Economic Growth With High-level Debts | Decline of Global Economic Growth in 2022
Decline of Global Economic Growth in 2022: The World Bank has warned against the decline of Economic Growth in the year 2022 due to high debt levels and income inequality due to Covid 19 variants threatened the recovery in developing economies.
The global economic growth is expected to decrease “markedly” to 4.1% in 2022 from 5.5% last year and may drop further to 3.2% in 2023 as pent-up demand dissipates and governments unwind massive fiscal and monetary support provided early in the pandemic.
The World Bank on Tuesday (January 11, 2022) cut down its prediction for economic growth in the United States, the Euro area, and China. With a warning that high debt levels, rising income inequality, and new COVID-19 variants have put a serious threat to the recovery in developing economies in the world.
“There is a pronounced slowdown underway,” Ayhan Kose, director of the World Bank`s Prospects group, told Reuters in an interview. “Policy support is being withdrawn and there is a multitude of risks ahead of us.”
Effect of COVID-19 in World @ Q1 2022
COVID-19 has caused nearly 300 million reported infections worldwide and over 5.8 million deaths, according to data compiled by Reuters.
While 59% of the world`s population has received at least one dose of a COVID-19 vaccine, only 8.9% of people in low-income countries have received at least one dose, according to the Our World in Data website.
Ayhan Kose also said that the pandemic had spread diverging growth rates between the advanced and developing economies of the world, as well as within countries, which may spark increased social tensions and unrest.
The report forecast on growth in advanced economies declining to 3.8% in 2022 from 5% in 2021, and may drop further to 2.3% in 2023 but said their output and investment would still return to their pre-pandemic trend by 2023.
The COVID-19 pandemic had sharply increased the global inequality in income, economic growth, healthcare, and the scale of job losses, which is hitting women and low-skilled and informal workers much harder in most of the developing countries.
“This trend has the potential to leave lasting scars,” Kose said, noting that disruptions in education could affect human capital for generations.
We can just hope that this pandemic comes to an effective end, may stop of Decline of Global Economic Growth in 2022, and may boost the prosperity of people across the world.