News Everywhere

World Bank Warns Of A Worldwide Economic Slowdown

THE World Bank has warned of a global economic slowdown, which could become a protracted period of ‘feeble growth’ and elevated inflation with potentially harmful consequences for middle and low-income economies.

In its latest Global Economic Prospects report, the World Bank said the Covid-19 pandemic and the ongoing Russia/Ukraine conflict have negative impact on global growth, predicting that in many countries, recession will be hard to avoid.


The geopolitical developments in Eastern Europe where Russia is conducting a special military operation in Ukraine, have triggered price increases across the world, including in Zimbabwe, as supply chains have been significantly affected.


With the conflict dragging on, logistical delays are likely to continue to disrupt the flow of materials into the sub-region while other goods may fail to arrive.


Several local businesses have already highlighted the knock-on effect of the conflict to their operations.


Zimbabwe is projecting a 5,5 percent Gross Domestic Product (GDP) growth this year.


“Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent that was anticipated in January,” the global financial institution said.


“It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn.

“As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly five percent below its pre-pandemic trend,” reads part of the report.


The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hampering growth.


To that end, the World Bank said as markets look forward, they are encouraged to scale up production and avoid trade restrictions.

The report further says that among emerging markets and developing economies, growth is projected to fall from 6.6 percent in 2021 to 3.4 percent in 2022—well below the annual average of 4.8 percent over 2011-2019.


“The negative spill overs from the war will more than offset any near-term boost to some commodity exporters from higher energy prices,” it said.