The global economy faces a “grim outlook” as the aftershocks of the pandemic continue to weigh on growth – especially in poor countries, World Bank president David Malpass has said.
The World Bank’s forecast predicts global growth will slow to 4.1% this year from 5.5% in 2021. It attributed the slowdown to virus threats, government aid unwinding and an initial rebound in demand fading.
Malpass said his greatest worry was widening global inequality.
“The big drag is the inequality that’s built into the system,” he told the BBC, noting that poorer countries were especially vulnerable to economic damage from efforts to fight inflation.
“The outlook for the weaker countries is still to fall further and further behind. That causes insecurity.”
By 2023, economic activity in all advanced economies, such as the US, Euro area and Japan, is likely to have recovered from the hit it took during the pandemic, the bank said.
But output in developing and emerging countries is expected to remain 4% lower than it was before Covid struck.