World Bank Warns of Global Recession, Stagflation — ‘This Is the Sharpest Slowdown in 80 Years’ – Economics Bitcoin News

A possible global recession has been warned by the World Bank. “For many countries, recession will be hard to avoid,” said World Bank President David Malpass. “This is the sharpest slowdown in 80 years.”

World Bank, Global Recession, Stagflation

Tuesday was a day of alarm from the World Bank about the risk of global recession, stagflation, and other risks. David Malpass (President of the World Bank) stated:

Growth is being hampered by the war in Ukraine, China lockdowns, disruptions to supply chains, and risk of stagflation. Recession will not be easy to avoid for many countries.

“Markets look forward, so it is urgent to encourage production and avoid trade restrictions. Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality,” he explained.

Bloomberg Tuesday’s World Bank president stated that the world is not yet in a recession. However, “The downside risk is that it could be a global recession,” he opined.

“One of the key variables is whether supply comes back online in order to add growth and slow down the inflation rate,” Malpass continued.

He emphasized:

It is the largest slowdown in 80-years.

“That’s from the 2021 rate which was high because of the recovery from Covid to what we are looking at now, 2.9%, in 2022,” he detailed. “That’s a very sharp slowdown and it’s really hitting the poorer countries hard.”

In a report issued Tuesday, the Bank described: “Global growth is expected to slump from 5.7% in 2021 to 2.9% in 2022 — significantly lower than 4.1% that was anticipated in January.”

Also, the Bank warned of stagflation and stated that there is a high risk. The World Bank also noted that inflation and slow growth could persist for many years.

Commenting on the Bank’s stagflation warning, Malpass stressed:

It’s global but it particularly hits the developing countries.

“There’s a lot of inequality in the world so the advanced economies and particularly the people at the top in the advanced economies have done very well over the last decade,” he noted.

Malpass elaborated: “The reason that this is a prolonged risk for the world is that we are coming off of a very exceptionally low period of interest rates. Last year, I called it uncharted territory on both fiscal policy … and monetary policy.”

Let us know your thoughts on the comments made by President Malpass of World Bank. Please leave your comments below.

Kevin Helms

Kevin, a student of Austrian Economics and evangelist since 2011, discovered Bitcoin. He’s interested in Bitcoin security, open source systems, network effects, cryptography, and how economics intersect with cryptography.