This year’s expectations of the World Bank have decreased
A second recession in the same decade?
The World Bank has released its new quarterly global report on global economic prospects. It is known from the forecasts that this year the institution’s growth expectations regarding the global economy have fallen to 1.7 percent. The previous forecast was 3 percent. The downgrade comes from the bank cutting its growth forecasts for developed countries by 95 percent and for developing countries by 70 percent.
In the statement of the bank, it is stated that the increase inflation global growth slows sharply against the background of indicators, increase of accounting rates, decrease of investments, Russia’s intervention in Ukraine. Higher than expected given fragile economic conditions, according to the World Bank inflation, any new negative trend, such as a sudden rise in interest rates to curb it, a resurgence of the COVID-19 pandemic, or an increase in geopolitical tensions, could easily push the global economy into recession. In this case, there will be two global recessions in the same decade for the first time in more than 80 years.
The World Bank is also worried that the decrease in economic growth indicators will increase poverty. According to the organization’s report, about 60 percent of the world’s extreme poor are in Sub-Saharan Africa. In 2023-24, per capita income growth there is expected to be only 1.2 percent on average. This can increase rather than reduce the level of poverty.
Another issue that the bank expresses concern about is the decline of investments in the global economy. According to the World Bank, the decline in investment is a serious concern as it is linked to weak productivity and trade, and weakens the overall economic outlook. It is important to note that significant progress on broader development and climate goals is not possible without strong and sustained investment growth. Bank in this view, it is very important to define a sound financial and monetary policy and carry out comprehensive reforms in the investment environment in order to increase investments.
What are the expectations of major economies?
According to the report of the World Bank, economic growth in advanced economies is predicted to decrease from 2.5 percent in 2022 to 0.5 percent this year.. Bank warns that slowdowns on this scale over the past two decades have resulted from global recessions news gives In the United States, the world’s largest economy, growth is projected to fall to 0.5 percent in 2023. This is 1.9 percentage points below previous forecasts and the weakest growth since 1970, excluding the years of economic decline.
Economic growth in the euro area is expected to be zero percent this year. As for China, growth is predicted at 4.3 percent in 2023. This is 0.9 percent lower than previous forecasts. Growth in emerging markets and economies excluding China is expected to slow from 3.8 percent in 2022 to 2.7 percent in 2023. This is high inflationcurrency depreciation, tighter financial conditions increase risks.
What are the expectations regarding Azerbaijan?
The World Bank’s report also includes expectations about Azerbaijan. According to the bank, in 2023, the economic growth indicator in Azerbaijan will be 2.8 percent. According to the results of the first 11 months of last year, Azerbaijan economy grew by 4.8 percent. From this point of view, it is clear that World Bank in 2023 Azerbaijan thinks that its economy will grow less than in 2022. Bank About 2024 Azerbaijan slightly lowered the growth expectation of the economy to 2.6 percent.
It is clear from the indicators of the World Bank about the countries of the South Caucasus that the lowest growth forecast To Azerbaijan is relevant, because the institution will contribute 4 percent of Georgia’s economy in 2023, 5 percent in 2024, Armenia economy is expected to grow by 4.1 and 4.8 percent, respectively.
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