{"id":37911,"date":"2023-06-08T15:45:25","date_gmt":"2023-06-08T15:45:25","guid":{"rendered":"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing"},"modified":"2023-06-08T15:54:34","modified_gmt":"2023-06-08T15:54:34","slug":"world-bank-says-global-economy-on-precarious-footing","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing","title":{"rendered":"World Bank Says Global Economy on Precarious Footing"},"content":{"rendered":"

Africa-Press – Liberia. <\/strong><\/span>Global growth has slowed sharply and the risk of financial stress in emerging market and developing economies (EMDEs) is intensifying amid elevated global interest rates, according to the World Bank\u2019s latest Global Economic Prospects report.<\/p>\n

Global growth is projected to decelerate from 3.1% in 2022 to 2.1% in 2023. In EMDEs other than China, growth is set to slow to 2.9% this year from 4.1% last year. These forecasts reflect broad-based downgrades.<\/p>\n

\u201cThe surest way to reduce poverty and spread prosperity is through employment\u2014and slower growth makes job creation a lot harder,\u201d said World Bank Group President Ajay Banga. \u201cIt\u2019s important to keep in mind that growth forecasts are not destiny. We have an opportunity to turn the tide but it will take us all working together.\u201d<\/p>\n

Most EMDEs have seen only limited harm from the recent banking stress in advanced economies so far, but they are now sailing in dangerous waters. With increasingly restrictive global credit conditions, one out of every four EMDEs has effectively lost access to international bond markets. The squeeze is especially acute for EMDEs with underlying vulnerabilities such as low creditworthiness. Growth projections for these economies for 2023 are less than half those from a year ago, making them highly vulnerable to additional shocks.<\/p>\n

\u201cThe world economy is in a precarious position,\u201d said Indermit Gill, the World Bank Group\u2019s Chief Economist and Senior Vice President. \u201cOutside of East and South Asia, it is a long way from the dynamism needed to eliminate poverty, counter climate change, and replenish human capital.<\/p>\n

In 2023, trade will grow at less than a third of its pace in the years before the pandemic. In emerging markets and developing economies, debt pressures are growing due to higher interest rates.<\/p>\n

Fiscal weaknesses have already tipped many low-income countries into debt distress. Meanwhile, the financing needs to achieve the sustainable development goals are far greater than even the most optimistic projections of private investment.\u201d<\/p>\n

The latest forecasts indicate that the overlapping shocks of the pandemic, the Russian invasion of Ukraine, and the sharp slowdown amid tight global financial conditions have dealt an enduring setback to development in EMDEs, one that will persist for the foreseeable future.<\/p>\n

By the end of 2024, economic activity in these economies is expected to be about 5% below levels projected on the eve of the pandemic. In low-income countries\u2014especially the poorest\u2014the damage is stark: in more than one-third of these countries, per capita incomes in 2024 will still be below 2019 levels.<\/p>\n

This feeble pace of income growth will entrench extreme poverty in many low-income countries.<\/p>\n

\u201cMany developing economies are struggling to cope with weak growth, persistently high inflation, and record debt levels. Yet new hazards\u2014such as the possibility of more widespread spillovers from renewed financial stress in advanced economies\u2014could make matters even worse for them,\u201d said Ayhan Kose, Deputy Chief Economist of the World Bank Group. \u201cPolicy makers in these economies should act promptly to prevent financial contagion and reduce near-term domestic vulnerabilities.\u201d<\/p>\n

In advanced economies, growth is set to decelerate from 2.6% in 2022 to 0.7% this year and remain weak in 2024, the report says. After growing 1.1% in 2023, the U.S. economy is set to decelerate to 0.8% in 2024, mainly because of the lingering impact of the sharp rise in interest rates over the past year and a half.<\/p>\n

In the euro area, growth is forecast to slow to 0.4% in 2023 from 3.5% in 2022, due to the lagged effect of monetary policy tightening and energy-price increases.<\/p>\n

The report also offers an analysis of how increases in U.S. interest rates are affecting EMDEs. Most of the rise in two-year Treasury yields over the past year and a half has been driven by investor expectations of hawkish U.S. monetary policy to control inflation.<\/p>\n

According to the report, this particular type of interest rate increase is associated with adverse financial effects in EMDEs, including a higher probability of financial crisis.<\/p>\n

Moreover, these effects are more pronounced in countries with greater economic vulnerabilities. In particular, frontier markets\u2014those with less developed financial markets and more limited access to international capital\u2014tend to see outsized increases in borrowing costs; for instance, sovereign risk spreads in frontier markets tend to rise by more than three times as much as those in other EMDEs.<\/p>\n

In addition, the report provides a comprehensive assessment of the fiscal policy challenges confronting low-income economies. These countries are in dire straits. Rising interest rates have compounded the deterioration in their fiscal positions over the past decade.<\/p>\n

Public debt now averages about 70% of GDP. Interest payments are eating up a rising share of limited government revenues. 14 low-income countries are already in, or at high risk of, debt distress.<\/p>\n

Spending pressures have risen in these economies. Adverse shocks such as extreme climate events and conflict are more likely to tip households into distress in low-income countries than anywhere else because of limited social safety nets. On average, these countries spend just 3% of GDP on their most vulnerable citizens\u2014well below the 26% average for developing economies.<\/p>\n

For More News And Analysis About Liberia<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Liberia. Global growth has slowed sharply and the risk of financial stress in emerging market and developing economies (EMDEs) is intensifying amid elevated global interest rates, according to the World Bank\u2019s latest Global Economic Prospects report. Global growth is projected to decelerate from 3.1% in 2022 to 2.1% in 2023. In EMDEs other […]<\/p>\n","protected":false},"author":84,"featured_media":37910,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7,244],"tags":[233,237,234],"class_list":["post-37911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","category-to-homepage","tag-africa-press","tag-africa-press-liberia","tag-liberia"],"yoast_head":"\nWorld Bank Says Global Economy on Precarious Footing - Liberia<\/title>\n<meta name=\"description\" content=\"Global growth has slowed sharply and the risk of financial stress in emerging market and developing economies (EMDEs) is ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"World Bank Says Global Economy on Precarious Footing\" \/>\n<meta property=\"og:description\" content=\"Global growth has slowed sharply and the risk of financial stress in emerging market and developing economies (EMDEs) is ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing\" \/>\n<meta property=\"og:site_name\" content=\"Liberia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-08T15:45:25+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-08T15:54:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/liberia\/sites\/37\/2023\/06\/sm_1686227040.041217.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/liberia\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"World Bank Says Global Economy on Precarious Footing\",\"datePublished\":\"2023-06-08T15:45:25+00:00\",\"dateModified\":\"2023-06-08T15:54:34+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing\"},\"wordCount\":848,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/liberia\/sites\/37\/2023\/06\/sm_1686227040.041217.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Liberia\",\"Liberia\"],\"articleSection\":[\"all news\",\"economy\",\"head lines\",\"to-homepage\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing\",\"url\":\"https:\/\/www.africa-press.net\/liberia\/all-news\/world-bank-says-global-economy-on-precarious-footing\",\"name\":\"World Bank Says Global Economy on Precarious Footing - 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