The World Bank Group President, David Malpass, has warned that global growth is expected to be weak in 2023, slowing to two per cent from 3.1 per cent in 2022.
Malpass shared this somber outlook in his opening address at the ongoing Spring Meetings 2023 Media Call.
He cited several factors that were weighing on the second-half outlook, including rising oil prices, banking sector stress, and persistent inflation pressures.
Malpass went on to express concern about slow growth persisting for years for many developing countries, increasing fiscal stress and debt problems.
This would be due to weak investment, higher interest rates, and relatively weak growth in the advanced economies.
He noted that the danger was acute due to inflation, currency depreciation, rising debt service costs, and the collapse of international reserves.
In addition, Malpass highlighted the grave obstacles that developing countries face in producing electricity, fertilizer, and food due to the diversion of natural gas to Europe.
These problems, he said, severely constrain future growth and deepen inequality and fragility for developing countries.
News About Nigeria observed that as part of the World Bank’s efforts to provide support in the face of these challenges, Malpass recently traveled to West Africa.
However, he cautioned that there were two major problems to address: first, the normalization of interest rates after a decade near zero, which has created problems in terms of bank failures, liquidity shortages, and how to allocate losses; and second, the severe constraints on developing country growth due to the diversion of natural gas to Europe.
The outlook for global growth in 2023 is uncertain and challenging, and it will require coordinated action and support from governments, international organizations, and the private sector to address these issues and promote sustainable and inclusive growth.