TEHRAN (Iran News) –The world put behind 2012 with many unpleasant economic conditions that all emerged mostly after the Russia-Ukraine war broke out and many forecasts by the international economic bodies like the International Monetary Fund (IMF) and the World Bank went wrong with considerable margin of error and it is predicted the economic chaos like inflation and fuel crisis to continue in 2023.
After the IMF Chief Kristalina Georgieva last week warned over the economic condition in 2023 and said: “The global economy faces “a tough year, tougher than the year we leave behind.” “We expect one-third of the world economy to be in recession,” Georgieva told CBS’s ‘Face the Nation’ in an interview aired Jan. 1. “Why? Because the three big economies — U.S., EU, China — are all slowing down simultaneously.”
Now the World Bank has such a forecast for 2023 and has warned the world over a tough economic condition for 2023.
The World Bank in its latest report slashed its 2023 growth forecasts to levels teetering on the brink of recession for many countries as the impact of central bank rate hikes intensifies, Russia’s war in Ukraine continues, and the world’s major economic engines sputter.
The development lender said it now expected global GDP growth of 1.7% in 2023 — the slowest pace outside the 2009 and 2020 recessions in nearly three decades. In its previous Global Economic Prospects report, in June 2022, the bank had forecast 2023 global growth at 3.0%.
The bank said major slowdowns in advanced economies, including sharp cuts to its forecast to 0.5% for both the United States and the euro zone, could foreshadow a new global recession less than three years after the last one.
“Given fragile economic conditions, any new adverse development — such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions — could push the global economy into recession,” the bank said in a statement accompanying the report.
The bleak outlook will be especially hard on emerging market and developing economies, the World Bank said, as they struggle with heavy debt burdens, weak currencies and income growth, and slowing business investment that is now forecast at a 3.5% annual growth rate over the next two years — less than half the pace of the past two decades.
“Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” World Bank President David Malpass said in a statement.
China’s growth in 2022 slumped to 2.7%, its second slowest pace since the mid-1970s after 2020, as zero-COVID restrictions, property market turmoil and drought hit consumption, production and investment, the World Bank report said. It predicted a rebound to 4.3% for 2023, but that is 0.9 percentage-point below the June forecast due to the severity of COVID disruptions and weakening external demand.
The World Bank noted that some inflationary pressures started to abate as 2022 drew to a close, with lower energy and commodity prices, but warned that risks of new supply disruptions were high, and elevated core inflation may persist. This could cause central banks to respond by raising policy rates by more than currently expected, worsening the global slowdown, it added.
The bank called for increased support from the international community to help low-income countries deal with food and energy shocks, people displaced by conflicts, and a growing risk of debt crises. It said new concessional financing and grants are needed along with the leveraging of private capital and domestic resources to help boost investment in climate adaptation, human capital and health, the report said.
The report comes as the World Bank’s board this week is expected to consider a new “evolution road map” for the institution to vastly expand its lending capacity to address climate change and other global crises. The plan will guide negotiations with shareholders, led by the United States, for the biggest revamp in the bank’s business model since its creation at the end of World War Two.
Although both the IMF and World Bank have criticized big economies but the question is who should be blamed for such a chaotic economic condition in the world.
The answer can be found in the West’s behavior which ignited the Russia-Ukraine war which caused chaos in any economic component in the world. The war worsened the fuel and food conditions for the world and it led to recession and inflation in most countries even in the Western ones and unfortunately those who have been behind such economic chaos just think of getting their own countries and nations out of this crisis and they give no damn to the other nations.
The West instead of trying to encourage Ukraine and Russia to stop war and make peace fans the flame of war and as long as the war goes on, one cannot expect any major economic serenity to return to the world and in between those countries which are weaker will suffer more and those who should be blamed for the current economic crisis make money by selling weapons to the warring side.
The United Nations should take serious and fair action to restore peace otherwise the condition will get worse and this crisis may also continue in 2024 and many people in the world would suffer from fuel and food shortages because of high prices.
And if the international economic bodies seek a solution to improve the global economic condition, they are better step up pressure on the countries which back war in any part of the world because war has no actual winner and anybody is loser of war.