United States: The world's economies are fragile, so any new negative event could send them into recession, according to a report released by the World Bank on Tuesday. Furthermore, two global recessions in the same decade would be unprecedented in more than 80 years.
Unexpectedly high inflation, a resurgence of COVID-19, or rising geopolitical tensions are some of the potential issues that could cause the world to enter a recession.
This year, it is projected that the global economy will grow by 1.7%. An earlier report by the World Bank estimated the projected increase to be 3%.
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According to the World Bank, the US economy is expected to contract by 0.5% this year. This represents the weakest performance outside a declared recession since 1970 and is 1.9 percentage points below previous forecasts.
Globally, advanced economies are expected to grow 0.5% this year, up from 2.5% in 2022. According to the World Bank, a recession of this size had been predicted before a global recession.
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The World Bank predicted that growth in emerging market and developing economies (other than China) would slow to 2.7% this year from 3.9% in 2022.
According to World Bank Group President David Malpass, "Emerging and developing countries face a multi-year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies which are compounded by extremely high government debt levels and rising interest rates."
"Weakness in business investment and growth will add to already catastrophic declines in infrastructure, health and education, as well as increasing demands from climate change."
