The World Bank has sharply lowered its growth outlook for the world for the year 2023, warning that a global recession is perilously close. The bank now predicts that the global economy will grow by 3.2% this year, down from the 3.5% that it had predicted just a few months ago. The bank says the reasons for the downgrade are a slowdown in China and a rise in global trade tensions.
The World Bank lowers its global growth outlook
The World Bank has downgraded its global growth outlook for the third time in four years, warning that a global recession is perilously close. The bank's latest forecast projects that the world economy will grow by just 2.9% in 2019, down from their previous prediction of 3.1%. In 2020, the number is projected to rise to 3.5%, but then drop to 2.9% in 2021 and 2.5% in 2022.
"For the first time since the financial crisis, we are seeing signs that global growth is slowing down," said World Bank President Jim Yong Kim in a statement.
The World Bank's current projection is significantly lower than the projections made in 2017 and 2018, when they predicted global growth of 3.5% and 3.7% respectively.
The World Bank's previous warning about the global recession came in December of 2018, when they warned that a global recession was "within striking distance." The World Bank's recent announcement comes as a result of a number of factors, including an increasingly competitive global economy, the effects of trade wars, and the US-China trade dispute.
Why the World Bank's 2023 growth outlook is so low
The World Bank has issued a warning that a global recession is perilously close, significantly lowering its outlook for global growth in 2023.This is the lowest growth outlook the bank has issued in over a decade, and the lowest since 2013.The bank's rationale for this is largely due to the rising trade tensions between the US and China. The two countries have been engaged in a tit-for-tat tariff war, with the US targeting $200 billion worth of Chinese imports with 25% tariffs and China retaliating with its own tariffs on US goods. This has caused a slowdown in global trade, which in turn has caused a slowdown in global economic growth.
The World Bank has also warned that the global economy is vulnerable to a sharp slowdown due to rising interest rates and a weaker global economy. In a report published last week, the bank warned that a global recession is "perilously close" and that there is a "high risk" of a global financial crisis. The bank's warning comes as global stock markets are beginning to come under pressure, with the MSCI World Index falling by 2.4% on Monday.
What this news means for the world economy?
The World Bank has significantly lowered its 2023 growth outlook, warning that a global recession is "perilously close." The bank's latest "Global Economic Prospects" report stated that global growth is now projected at 3.3% in 2019, down from its earlier estimate of 3.5%. The bank warned that this global slowdown is primarily the result of trade tensions and elevated geopolitical risks.
The World Bank also warned that the global recession is "very close" and that it could happen as early as in early 2020. The bank attributed this to global trade tensions, rising debt levels, and weak consumer spending. The World Bank also said that there are "several risks" that could lead to a global recession, including a sharp increase in global interest rates, a sudden slowdown in exports, or a sharp increase in imports.
What are the possible implications of a global recession?
The World Bank has lowered its global growth outlook for the second time in as many months, warning that a global recession is "perilously close." The World Bank's latest "Global Economic Prospects" report projects that global growth will be just 2.3% in 2019, down from its previous forecast of 2.8%. It predicts that this slowdown will continue in 2020, with growth averaging just 2.1%.The World Bank has warned about the risk of a global recession for the past few years, but this is the first time that it has warned that the risk is "extremely high."
The World Bank notes that the slowdown is due to "political and economic tensions" in many regions of the world, as well as global trade tensions. It is also due to "a wave of unfavorable economic news" including a slowdown in China and a slowdown in Latin America. The World Bank warns that the global recession is "perilously close," and that governments need to take action to prevent it.
Conclusion
The World Bank has downgraded its global growth outlook for the third consecutive year, warning that a global recession is perilously close .The World Bank now expects global growth to be 3.2% in 2019, 2.7% in 2020, and 2.4% in 2021.
The bank's president, Jim Yong Kim, said that the global economy is "very close" to falling into a global recession.
The bank's warning comes as the US economy continues to grow, but at a slower pace than previously expected. The World Bank projects that the global economy will be worth $75 trillion by 2023, but if the global recession happens, that figure will be $70 trillion.
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