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World Bank Warns of Global Recession, Stagflation — ‘This Is the Sharpest Slowdown in 80 Years’

The World Bank has warned about the rising risk of stagflation and global recession.

World Bank President David Malpass said this  is the sharpest slowdown in 80 years.

“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,”.

“There is a lot of disparity in the world,” he explained, “so the advanced economies, and especially the people at the top of the advanced economies, have done quite well over the previous decade.”

“The reason that this is a lengthy concern for the world is that we are coming off of a very unusually low time of interest rates,” Malpass explained. Last year, I described fiscal and monetary policy as “uncharted territory.”

On Bloomberg Tuesday, World Bank President reiterated that the world is not yet in a recession. “The negative risk,” he said, “is that it might be a worldwide recession.”

“One of the critical variables is whether supply returns to the market in order to boost GDP and lower inflation,” Malpass remarked.

“Global growth is forecast to collapse from 5.7 percent in 2021 to 2.9 percent in 2022 — much lower than the 4.1 percent expected in January,” the Bank said in a study released Tuesday.

The Bank also issued a warning on stagflation, indicating that the risk of stagflation is high. In addition, the World Bank warned that inflation and weak growth could last for years.

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