The world economy is at risk of recession, says the World Bank

The World Bank predicted that poorer growth in all three of the world’s largest economies – the United States, Europe, and China – will push the global economy “perilously near” to a recession this year.

The World Bank, which provides loans to less developed nations for development projects, stated in an annual report that it has reduced its expectation for global growth this year by almost half, to just 1.7%, from its earlier projection of 3%.

If that prediction comes true, it will rank behind only the severe recessions brought on by the 2008 global financial crisis and the pandemic in 2020 as the worst yearly expansion in the past three decades.

Despite the World Bank’s forecast that the US economy will grow by just 0.5% this year, the country’s firms and consumers will undoubtedly face additional challenges as a result of the global downturn in addition to high costs and higher borrowing costs.

If COVID continues to rise or the conflict in Ukraine gets worse, the United States is still at risk of experiencing additional supply chain disruptions. Additionally, a weakened Chinese economy will probably hurt Europe, a long-time significant exporter to China.

The World Bank research also mentioned how higher interest rates will draw capital from poorer nations, depriving them of essential domestic investment. Developed economies like the United States and Europe are examples of this.