The World Bank says slowdown in China and the US and a likely recession in Europe would have grave consequences for developing countries.
World Bank sees likely Europe recession, slower growth in China
World Bank President David Malpass has warned it could take years for global energy production to diversify away from Russia after its invasion of Ukraine, prolonging the risk of stagflation, or a period of low growth and high inflation.
In a speech at Stanford University, Malpass said there was an increased likelihood of recession in Europe, while China’s growth was slowing sharply, and US economic output had contracted in the first half of the year.
Those developments would have grave consequences for developing countries, Malpass said, citing what he called “consequential” and “worsening” challenges facing development.
Addressing the current “perfect storm” of rising interest rates, high inflation and slowing growth required new macro- and micro-economic approaches, including better targeted spending and clearly messaged efforts to increase supplies, he added.