12-06-2023, 07:26 AM
Why is the World Bank so pessimistic about global economic growth?
#Econgram_World
Facts:
1) The World Bank projects a slowdown in global economic growth from 3.1% in 2022 to 2.1% this year. In 2024, the output is expected to rise by 2.4%, below the past forecast of 2.7%.
2) Overall, at least 65% of countries would face a lower growth rate this year than last year.
Analysis:
1) Several factors worsened the economic growth outlook:
- The recent U.S. banking crisis changed investors’ expectations: many financial institutions reduced the amount of credit offered.
- The rise in interest rates in rich countries posed a challenge to developing economies. Those countries that financed their fiscal policies with debt are now struggling to repay their loans. 14 of 28 low-income countries are in or at high risk of debt distress*.
- The pandemic and the war in Ukraine have hammered decades of global poverty reduction. Incomes in the poorest countries are expected to decrease by 6% in 2024.
2) The growth slowdown is apparent in advanced economies too. The U.S. will grow by 1.1% this year and by 0.8% in 2024.
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#Econgram_World
Facts:
1) The World Bank projects a slowdown in global economic growth from 3.1% in 2022 to 2.1% this year. In 2024, the output is expected to rise by 2.4%, below the past forecast of 2.7%.
2) Overall, at least 65% of countries would face a lower growth rate this year than last year.
Analysis:
1) Several factors worsened the economic growth outlook:
- The recent U.S. banking crisis changed investors’ expectations: many financial institutions reduced the amount of credit offered.
- The rise in interest rates in rich countries posed a challenge to developing economies. Those countries that financed their fiscal policies with debt are now struggling to repay their loans. 14 of 28 low-income countries are in or at high risk of debt distress*.
- The pandemic and the war in Ukraine have hammered decades of global poverty reduction. Incomes in the poorest countries are expected to decrease by 6% in 2024.
2) The growth slowdown is apparent in advanced economies too. The U.S. will grow by 1.1% this year and by 0.8% in 2024.
Inspired by NYT
👉 Join The Econgram
https://www.nytimes.com/2023/06/06/busin...-ios-share&referringSource=articleShare