Global Growth to Slow through 2023, Adding to Risk of 'Hard ...

WASHINGTON, Jan. ... Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as ... WhoWeAre News Thispagein: EN dropdown Español Français العربية Русский TiếngViệt 中文 Български Português 日本語 Türkçe Thispagein:_ English Español Français العربية Русский TiếngViệt 中文 Български Português 日本語 Türkçe dropdown PRESSRELEASE January11,2022 GlobalGrowthtoSlowthrough2023,AddingtoRiskof‘HardLanding’inDevelopingEconomies Email Print Tweet Share Share LinkedIn Digg 人人网 StumbleUpon Delicious 新浪微博 SpreadofCOVID-19VariantsAlongsideInflation,Debt,andInequalityIntensifiesUncertaintyWASHINGTON,Jan.11,2022—Followingastrongreboundin2021,theglobaleconomyisenteringapronouncedslowdownamidfreshthreatsfromCOVID-19variantsandariseininflation,debt,andincomeinequalitythatcouldendangertherecoveryinemerginganddevelopingeconomies,accordingtotheWorldBank’slatestGlobalEconomicProspectsreport.Globalgrowthisexpectedtodeceleratemarkedlyfrom5.5percentin2021to4.1percentin2022and3.2percentin2023aspent-updemanddissipatesandasfiscalandmonetarysupportisunwoundacrosstheworld.TherapidspreadoftheOmicronvariantindicatesthatthepandemicwilllikelycontinuetodisrupteconomicactivityinthenearterm.Inaddition,anotabledecelerationinmajoreconomies—includingtheUnitedStatesandChina—willweighonexternaldemandinemerginganddevelopingeconomies.Atatimewhengovernmentsinmanydevelopingeconomieslackthepolicyspacetosupportactivityifneeded,newCOVID-19outbreaks,persistentsupply-chainbottlenecksandinflationarypressures,andelevatedfinancialvulnerabilitiesinlargeswathsoftheworldcouldincreasetheriskofahardlanding.“TheworldeconomyissimultaneouslyfacingCOVID-19,inflation,andpolicyuncertainty,withgovernmentspendingandmonetarypoliciesinunchartedterritory.Risinginequalityandsecuritychallengesareparticularlyharmfulfordevelopingcountries,”saidWorldBankGroupPresidentDavidMalpass.“Puttingmorecountriesonafavorablegrowthpathrequiresconcertedinternationalactionandacomprehensivesetofnationalpolicyresponses.”Theslowdownwillcoincidewithawideningdivergenceingrowthratesbetweenadvancedeconomiesandemerginganddevelopingeconomies.Growthinadvancedeconomiesisexpectedtodeclinefrom5percentin2021to3.8percentin2022and2.3percentin2023—apacethat,whilemoderating,willbesufficienttorestoreoutputandinvestmenttotheirpre-pandemictrendintheseeconomies.Inemerginganddevelopingeconomies,however,growthisexpectedtodropfrom6.3percentin2021to4.6percentin2022and4.4percentin2023.By2023,alladvancedeconomieswillhaveachievedafulloutputrecovery;yetoutputinemerginganddevelopingeconomieswillremain4percentbelowitspre-pandemictrend.Formanyvulnerableeconomies,thesetbackisevenlarger:outputoffragileandconflict-affectedeconomieswillbe7.5percentbelowitspre-pandemictrend,andoutputofsmallislandstateswillbe8.5percentbelow.Meanwhile,risinginflation—whichhitslow-incomeworkersparticularlyhard—isconstrainingmonetarypolicy.Globallyandinadvancedeconomies,inflationisrunningatthehighestratessince2008.Inemergingmarketanddevelopingeconomies,ithasreacheditshighestratesince2011.Manyemerginganddevelopingeconomiesarewithdrawingpolicysupporttocontaininflationarypressures—wellbeforetherecoveryiscomplete.ThelatestGlobalEconomicProspectsreportfeaturesanalyticalsectionsthatprovidefreshinsightsintothreeemergingobstaclestoadurablerecoveryindevelopingeconomies.Thefirst,ondebt,comparesthelatestinternationalinitiativetotackleunsustainabledebtindevelopingeconomies—theG20CommonFramework—withpreviouscoordinatedinitiativestofacilitatedebtrelief.NotingthatCOVID-19pushedtotalglobaldebttothehighestlevelinhalfacenturyevenasthecreditors’landscapebecameincreasinglycomplex,itfindsthatfuturecoordinateddebtreliefinitiativeswillfacehigherhurdlestosuccess.ApplyinglessonsfromthepastrestructuringstotheG20CommonFrameworkcanincreaseitseffectivenessandavoidtheshortcomingsfacedbyearlierinitiatives.“Thechoicespolicymakersmakeinthenextfewyearswilldecidethecourseofthenextdecade,”saidMariPangestu,theWorldBank’sManagingDirectorforDevelopmentPolicyandPartnerships.“Theimmediatepriorityshouldbetoensurethatvaccinesaredeployedmorewidelyandequitablysothepandemiccanbebroughtundercontrol.Buttacklingreversalsindevelopmentprogresssuchasrisinginequalitywillrequiresustainedsupport.Inatimeofhighdebt,globalcooperationwillbeessentialtohelpexpandthefinancialresourcesofdevelopingeconomiessotheycanachievegreen,resilient,andinclusivedevelopment.”Thesecondanalyticalsectionexaminestheimplicationsofboom-and-bustcyclesofcommoditypricesforemergingmarketanddevelopingeconomies,mostofwhichareheavilydependentoncommodityexports.Itfindsthatthesecycleswereparticularlyintenseinthepasttwoyears,whencommoditypricescollapsedwiththearrivalofCOVID-19andthensurged,insomecasestoalltime-highslastyear.Globalmacroeconomicdevelopmentsandcommoditysupplyfactorswilllikelycauseboom-bustcyclestocontinueincommoditymarkets.Formanycommodities,thesecyclesmaybeamplifiedbytheforcesofclimatechangeandtheenergytransitionawayfromfossilfuels.Theanalysisalsoshowsthatcommodity-priceboomssincethe1970shavetendedtobelargerthanbusts,creatingsignificantopportunitiesforstrongerandmoresustainablegrowthincommodity-exportingcountries—iftheyemploydisciplinedpoliciesduringboomstotakeadvantageofwindfalls.ThethirdanalyticalsectionexploresCOVID-19’simpactonglobalinequality.Itfindsthatthepandemichasraisedglobalincomeinequality,partlyreversingthedeclinethatwasachievedovertheprevioustwodecades.Ithasalsoincreasedinequalityinmanyotherspheresofhumanactivity—intheavailabilityofvaccines;ineconomicgrowth;inaccesstoeducationandhealthcare;andinthescaleofjobandincomelosses,whichhavebeenhigherforwomenandlow-skilledandinformalworkers.Thistrendhasthepotentialtoleavelastingscars:forexample,lossestohumancapitalcausedbydisruptionsineducationcanspilloveracrossgenerations.AyhanKose,DirectoroftheWorldBank’sProspectsGroup,said:“Inlightoftheprojectedslowdowninoutputandinvestmentgrowth,limitedpolicyspace,andsubstantialriskscloudingtheoutlook,emerginganddevelopingeconomieswillneedtocarefullycalibratefiscalandmonetarypolicies.Theyalsoneedtoundertakereformstoerasethescarsofthepandemic.Thesereformsshouldbedesignedtoimproveinvestmentandhumancapital,reverseincomeandgenderinequality,andcopewithchallengesofclimatechange.”DownloadGlobalEconomicProspects here.RegionalOutlooks:EastAsiaandPacific: Growthisprojectedtodecelerateto5.1%in2022beforeincreasingslightlyto5.2%in2023.Formore,see regionaloverview.EuropeandCentralAsia: Growthisforecasttoslowto3.0%in2022yearand2.9%in2023.Formore,see regionaloverview.LatinAmericaandtheCaribbean: Growthisprojectedtoslowto2.6%in2022beforeincreasingslightlyto2.7%in2023.Formore,see regionaloverview.MiddleEastandNorthAfrica: Growthisforecasttoaccelerateto4.4%in2022beforeslowingto3.4%in2023.Formore,see regionaloverview.SouthAsia: Growthisprojectedtoaccelerateto7.6%in2022beforeslowingto6.0%in2023.Formore,seeregionaloverview.Sub-SaharanAfrica:Growthisforecasttoaccelerateslightlyto3.6%in2022andrisefurtherto3.8%in2023.Formore,see regionaloverview.Source:WorldBank.1.HeadlineaggregategrowthratesarecalculatedusingGDPweightsataverage2010-19pricesandmarketexchangerates.TheaggregategrowthratesmaydifferfromthepreviouslypublishednumbersthatwerecalculatedusingGDPweightsataverage2010pricesandmarketexchangerates.DataforAfghanistanandLebanonareexcluded.2.GDPgrowthratesareonafiscalyearbasis.Aggregatesthatincludethesecountriesarecalculatedusingdatacompiledonacalendaryearbasis.Pakistan'sgrowthratesarebasedonGDPatfactorcost.Thecolumnlabeled2019referstoFY2018/19.3.GDPgrowthratesareonafiscalyearbasis.Aggregatesthatincludethesecountriesarecalculatedusingdatacompiledonacalendaryearbasis.Thecolumnlabeled2019referstoFY2019/20.4.Worldgrowthratesarecalculatedusingaverage2010-19purchasingpowerparity(PPP)weights,whichattributeagreatershareofglobalGDPtoemergingmarketanddevelopingeconomies(EMDEs)thanmarketexchangerates.5.Worldtradevolumeofgoodsandnonfactorservices.6.OilpriceisthesimpleaverageofBrent,Dubai,andWestTexasIntermediateprices.Thenon-energyindexistheweightedaverageof39commodityprices(7metals,5fertilizers,and27agriculturalcommodities).Foradditionaldetails,pleaseseehttps://www.worldbank.org/commodities.Note:e=estimate;f=forecast.WorldBankforecastsarefrequentlyupdatedbasedonnewinformation.Consequently,projectionspresentedheremaydifferfromthosecontainedinotherWorldBankdocuments,evenifbasicassessmentsofcountries’prospectsdonotdifferatanygivendate.ForthedefinitionofEMDEs,developingcountries,commodityexporters,andcommodityimporters,pleaserefertotable1.2.EM7includesBrazil,China,India,Indonesia,Mexico,theRussianFederation,andTurkey.TheWorldBankiscurrentlynotpublishingeconomicoutput,income,orgrowthdataforTurkmenistanandRepúblicaBolivarianadeVenezuelaowningtolackofreliabledataofadequatequality.TurkmenistanandRepúblicaBolivarianadeVenezuelaareexcludedfromcross-countrymacroeconomicaggregates.Website:worldbank.org/gepFacebook:facebook.com/worldbankTwitter:twitter.com/worldbankYouTube:youtube.com/worldbank PRESSRELEASENO: 2022/038/EFI Contacts InWashington: JoeRebello (202)458-8051 [email protected] ForBroadcastRequests: DavidW.Young (202)473-4691 [email protected] RELATED RELATED ForewordbyWorldBankGroupPresidentDavidMalpassReportwebsiteReportdownloadDownloadreportdataDownloadallcharts(zip) Api Api