The Global Economic Outlook in five charts

After rebounding to an estimated 5.5 percent in 2021, global growth is expected to decelerate markedly in 2022—to 4.1 percent, ... Skiptomaincontent PublishedonVoices TheGlobalEconomicOutlookinfivechartsLuciaQuagliettiColletteWheeler|January11,2022 Thispagein: English 日本語 Français Español 中文 العربية Email Share Tweet Share Comment Image WorldBankGlobalEconomicProspects2022.Photocredit:VictorIdrogo/WorldBank Afterreboundingtoanestimated5.5percentin2021,globalgrowthisexpectedtodeceleratemarkedlyin2022—to4.1percent,reflectingcontinuedCOVID-19flare-ups,diminishedfiscalsupport,andlingeringsupplybottlenecks. Althoughoutputandinvestmentinadvancedeconomiesareprojectedtoreturntopre-pandemictrendsnextyear,theywillremainbelowinemergingmarketanddevelopingeconomies(EMDEs),owingtolowervaccinationrates,tighterfiscalandmonetarypolicies,andmorepersistentscarringfromthepandemic. Variousdownsideriskscloudtheoutlook,includingsimultaneousOmicron-driveneconomicdisruptions,furthersupplybottlenecks,ade-anchoringofinflationexpectations,financialstress,climate-relateddisasters,andaweakeningoflong-termgrowthdrivers.BecauseEMDEshavelimitedpolicyspacetoprovideadditionalsupportifneeded,thesedownsiderisksheightenthepossibilityofahardlanding. Thisunderscorestheimportanceofstrengtheningglobalcooperationtofosterrapidandequitablevaccinedistribution,calibratehealthandeconomicpolicies,enhancedebtsustainabilityinthepoorestcountries,andtacklethemountingcostsofclimatechange.   1.Globalgrowthisprojectedtodeceleratein2022and2023   Contributionsofmajoreconomiestoglobalgrowth Source:WorldBank.Note:Figureshowsthecontributiontoglobalgrowthforecastsover2021-23,whilethefirstbarshowstheaveragecontributiontogrowthinthe2015-19period.AggregatesarecalculatedusingrealU.S.dollarGDPweightsataverage2010-19pricesandmarketexchangerates.Shadedareaindicatesforecasts. Globalgrowthissettoslowsharply,astheinitialreboundinconsumptionandinvestmentfadesandmacroeconomicsupportiswithdrawn.Muchoftheglobalslowdownovertheforecasthorizonisaccountedforbymajoreconomies,whichwillalsoweighondemandinemergingmarketanddevelopingeconomies(EMDEs).     2.EMDEsareprojectedtoexperienceaweakerrecoverythanadvancedeconomies     Deviationofoutputfrompre-pandemictrends Source:WorldBank.Note:EMDEs=emergingmarketanddevelopingeconomies.FigureshowsthepercentdeviationbetweenthelatestprojectionsandforecastsreleasedintheJanuary2020editionoftheGlobalEconomicProspectsreport.For2023,theJanuary2020baselineisextendedusingprojectedgrowthfor2022.AggregatesarecalculatedusingrealU.S.dollarGDPweightsataverage2010-19pricesandmarketexchangerates.Shadedareaindicatesforecasts. Incontrasttoadvancedeconomies,mostEMDEsareexpectedtosuffersubstantialscarringtooutputfromthepandemic,withgrowthtrajectoriesnotstrongenoughtoreturninvestmentoroutputtopre-pandemictrendsovertheforecasthorizonof2022-23.   3.Aftersurprisingtotheupsidein2021,globalinflationisexpectedtoremainelevatedthisyear   Consensusmedianinflationforecasts Sources:ConsensusEconomics;WorldBank.Note:FigureshowstheConsensusforecastformedianheadlineCPIinflationfor2021-22basedonDecember2021andMay2021surveysof32advancedeconomiesand50EMDEs.Shadedareaindicatesforecasts. Thereboundinglobalactivity,togetherwithsupplydisruptionsandhigherfoodandenergyprices,havepushedupheadlineinflationacrossmanycountries.Morethanhalfofinflation-targetingEMDEsexperiencedabove-targetinflationin2021,promptingcentralbankstoincreasepolicyrates.Consensusforecastsanticipatemedianglobalinflationtoremainelevatedin2022.   4.SevereeconomicdisruptionsdrivenbytherapidandsimultaneousspreadingoftheOmicronvariantareakeydownsiderisktonear-termgrowth   PossibleOmicron-drivengrowthoutcomesfor2022 Sources:OxfordEconomics;WorldBank.Note:AEs=advancedeconomies;EMDEs=emergingmarketanddevelopingeconomies.Yellowlinesdenotetherangeofthedownsidescenarioinwhicheconomies(18advancedeconomiesand22EMDEs)facearangeofunanticipatedpandemicshocks,scaledfromaboutonetenthtoabouttwo-tenthsofthesizeofthosefromthefirsthalfof2020. Theslowdowninglobalgrowthfrom2021to2022couldbesharperifthefastspreadofOmicronoverwhelmshealthsystemsandpromptsare-impositionofstrictpandemiccontrolmeasuresinmajoreconomies.Omicron-driveneconomicdisruptionscouldreduceglobalgrowthfurtherthisyear—anywherefrom0.2to0.7percentagepoint,dependingonunderlyingassumptionsTheassociateddislocationscouldalsoaggravatesupplybottlenecksandexacerbateinflationarypressures.   5.Globalcooperationandeffectivenationalpolicieswillbeneededtoaddresstheseverecostsassociatedwithweatherandclimatedisasters   Economiclossesfromweatherandclimatedisasters   Source:EM-DAT,CRED/UCLouvain,https://www.emdat.be;WorldBank.Note:EMDEs=emergingmarketanddevelopingeconomies.Figureshowsthesumofalldamagesandeconomiclossesdirectlyorindirectlyrelatedtoweather,climate,andwater-relatedhazards.Hazardsareassociatedwithnatural,geophysical,meteorological,climatological,hydrological,andbiologicalevents. Severenaturaldisastersandclimate-relatedeventscouldalsoderailtherecoveryinEMDEs.GlobalcooperationisneededtoaccelerateprogresstowardmeetingthegoalsoftheParisAgreementonClimateChange,andtoreducetheeconomic,health,andsocialcostsofclimatechange,manyofwhichareborndisproportionatelybyvulnerablepopulations. Theinternationalcommunitycanalsohelpbyscalingupclimatechangeadaptation,increasinggreeninvestments,andfacilitatingagreenenergytransitioninmanyEMDEs.Nationalpolicyactionscanalsobetailoredtopromoteinvestmentsinrenewableenergyandinfrastructureandtofostertechnologicaldevelopment.Inaddition,policymakerscanprioritizegrowth-enhancingreformsthatincreasepreparednessforfutureclimate-relatedcrises.  Related PressRelease GlobalEconomicProspectsReport ReadFeatureStory Regions TheWorldRegion Series COVID-19(coronavirus) GlobalEconomicProspects LuciaQuaglietti SeniorEconomist,WorldBankProspectsGroup MoreBlogsByLucia https://www.linkedin.com/in/collettewheeler/ ColletteWheeler SeniorEconomist,ProspectsGroup,WorldBank MoreBlogsByCollette JointheConversation Yourname Email Thecontentofthisfieldiskeptprivateandwillnotbeshownpublicly Comment Abouttextformats Save