The World Bank announced on Tuesday a reduction in its global growth forecast for 2023 by 0.4%, bringing it down to 2.3%. The organization cited rising uncertainty as a “major obstacle” for nearly all economies. In its semi-annual Global Economic Prospects report, the World Bank lowered forecasts for nearly 70% of economies, including the United States, China, and Europe, as well as six emerging market regions, compared to levels from just six months prior.
The report highlighted that global trade is expected to grow by only 1.8% in 2023, down from 3.4% in 2022, largely due to ongoing tariff disputes and strained geopolitical relations. Global inflation is anticipated to reach 2.9% in 2023, remaining above pre-pandemic levels. The World Bank warned that risks to the global outlook remain decisively tilted to the downside, with further tariff escalations potentially reducing growth expectations by an additional 0.5 percentage points.
Despite these challenges, the risk of a global recession remains below 10%. Efforts are underway, including high-level meetings between the U.S. and China, to ease trade tensions that could disrupt global supply chains and slow growth. Growth forecasts for the U.S. were cut to 1.4%, while the Eurozone and Japan saw reductions to 0.7% each. Emerging markets and developing economies are projected to grow by 3.8% in 2023.
— new from press.ahdath-alyom.com