GLOBAL ECONOMIC PROSPECTS REPORT

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Context

In its latest Global Economic Prospects report the World Bank recently cut its 2022-23 (FY23) real gross domestic product (GDP) growth forecast for India to 7.5 per cent, from 8 per cent.
This is on the back of inflationary pressures, supply-chain pressures, and geopolitical tensions due to Russia’s invasion of Ukraine.

Key Highlights:

Regional Outlook

East Asia and Pacific: Growth is projected to decelerate to 4.4% in 2022 before increasing to 5.2% in 2023.
Europe and Central Asia: The regional economy is expected to shrink by 2.9% in 2022 year before growing by 1.5% in 2023.
Latin America and the Caribbean: Growth is projected to slow to 2.5% in 2022 and 1.9% in 2023.
Middle East and North Africa: Growth is forecast to accelerate to 5.3% in 2022 before slowing to 3.6% in 2023.
South Asia: Growth is projected to slow to 6.8% in 2022 and 5.8% in 2023.
Sub-Saharan Africa: Growth is forecast to moderate to 3.7% in 2022 and rise to 3.8% in 2023.

Overview:

Russia’s invasion of Ukraine and its effects on commodity markets, supply chains, inflation, and financial conditions have steepened the slowdown in global growth.
One key risk to the outlook is the possibility of high global inflation accompanied by tepid growth, reminiscent of the stagflation of the 1970s. This could eventually result in a sharp tightening of monetary policy in advanced economies, which could lead to financial stress in some emerging market and developing economies.
A forceful and wide-ranging policy response is required to boost growth, bolster macroeconomic frameworks, reduce financial vulnerabilities, and support vulnerable groups.

About Global Economic Prospects

Global Economic Prospects (GEP) is a flagship report of the World Bank Group, which examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semi-annual basis (in January and June).
Each edition includes analytical pieces on topical policy challenges faced by these economies.