Outbreaks, bottlenecks expected to slow global growth in '22

The World Bank is downgrading its outlook for the global economy

Via AP news wire
Tuesday 11 January 2022 15:49
World Bank-Global Economy
World Bank-Global Economy

The World Bank is downgrading its outlook for the global economy, blaming continuing outbreaks of COVID-19, a reduction in government economic support and ongoing bottlenecks in global supply chains.

The 189-country, anti-poverty agency forecasts worldwide economic growth of 4.1% this year, down from the 4.3% growth it was forecasting last June. It's also down from the 5.5% expansion it estimates the global economy tallied in 2021.

In its Global Economic Prospects report out Tuesday, the World Bank projects that the U.S. economy will grow 3.7% this year, down from 5.6% in 2021. It expects China the world’s second-biggest economy, to see growth decelerate to 5.1% in 2022 from 8% last year.

The 19 European countries that share the euro currency are expected to collectively grow 4.2% this year, down from 5.2% in 2021. And Japan is forecast to register 2.9% growth in 2022, up from 1.7% last year.

Emerging and developing economies are forecast to collectively grow 4.6% this year, down from 6.3% in 2021.

The arrival of COVID-19 in early 2020 slammed global economic output. The world economy shrank by 3.4% in 2020. Massive relief provided by governments and super-low interest rates engineered by central banks — and eventually the rollout of vaccines — triggered an unexpectedly strong recovery last year.

But the speed of the rebound caught businesses by surprise. They have scrambled to find raw materials and supplies to meet customer demand and the ships, trains and trucks to transport them. Especially in the United States, they have struggled to find workers to fill job openings.

One result has been the highest global inflation rates since 2008. Central banks are now reducing their support for economic growth and considered raising interest rates to combat higher prices.

“The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory,” World Bank President David Malpass said.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in