The World Bank made significant reductions to its 2023 global growth outlook in light of what it considers to be deteriorating economic conditions worldwide. The organization downgraded its forecasts for most advanced economies and reduced its global growth outlook to 1.7% for 2023, as stated in its latest report, “Global Economic Prospects.” This marks a significant decrease from its earlier projection of a 3% expansion of the world economy in 2023.
The World Bank has made a significant revision to its growth outlook, as it perceives the global economic conditions to be deteriorating. This has resulted in a sharp downward revision of its projections for almost all advanced economies, leading to a reduction of the global growth forecast from 3% to 1.7% for 2023. The latest World Bank report, Global Economic Prospects, highlights the bleak outlook.
The World Bank has revised its outlook for the US economy, reducing its growth forecast from 2.4% to 0.5%. The institution also downgraded its projections for China, Japan, Europe and Central Asia, reducing their growth outlooks to 4.3%, 1%, 0.1%, respectively.
According to the World Bank, the global growth has slowed to such an extent that the world economy is at the brink of falling into a recession. The sluggish growth is attributed to the “unexpectedly rapid and synchronous” tightening of the global monetary policy.
The reduced projections indicate that 2023 is expected to have the third weakest pace of growth in almost three decades, which will be overshadowed only by the pandemic-induced global recession and the global financial crisis of 2008.
The World Bank has revised down its growth projections for 2024, estimating the global economy to expand by 2.7% compared to its previous prediction of 3%. According to the bank, tighter monetary policies implemented by central banks globally have contributed to a decline in global financial conditions, which has negatively impacted economic activity.
The organization stated that while the tightening of monetary policies may have been crucial to curb inflation, it has resulted in a significant decline in global financial conditions. The World Bank also expressed concern over the current economic weakness in the US, euro area, and China and the spillover effects it is having on emerging market and developing economies.
In its latest report, Global Economic Prospects, the World Bank cut its growth outlook for 2023 from 3% to 1.7% and made substantial downward revisions to its projections for advanced economies including the US, China, Japan, and Europe and Central Asia. The bank declared that the world economy is “perilously close to falling into recession.
