World economy could face ‘stagflation’ — World Bank
The global economy is in danger of facing stagflation due to its high inflation and slow growth, said World Bank President David Malpass.
This comes as the global body sharply lowered its 2022 global growth forecast from January’s 4.1% to 2.9%.
Malpass stated, “Even if a global recession is averted, the pain of stagflation could persist for several years.”
“Several years of above-average inflation and below-average growth are now likely, with potentially destabilizing consequences for low- and middle-income economies. There’s a severe risk of malnutrition and of deepening hunger and even of famine in some areas,” he explained.
Growth in developing economies is also projected to roughly fall in half this year, slowing from 6.6% in 2021 to 3.4% in 2022.
The Russia-Ukraine war also caused commodity prices to increase, worsening food insecurity and extreme poverty in developing economies.
Global consumer price inflation has soared higher around the world and is above central bank targets in almost all countries.
