World Bank slashes global growth forecast to 2.9%

Ukraine war exacerbated the slowdown
World Bank slashes global growth forecast to 2.9%
The logo of the World Bank

The World Bank downgraded its global economic growth outlook for the second time this year as the Ukraine war entered its fourth month, exacerbating the slowdown induced by the Covid-19 pandemic.

The bank slashed its growth prediction for 2022 to 2.9 percent from 3.2 percent in April, citing the rising geopolitical situation as a threat to a “prolonged period of sluggish growth and high inflation,” according to a report released on Tuesday.

The current forecast is far below the January estimate of 4.1 percent and less than the 5.7 percent growth predicted in 2021.

As the Ukraine war affects economic activity, investment, and trade, lowering pent-up demand under tightening fiscal policies, growth is now predicted to linger around a similar level between 2023 and 2024.