WORLD BANK / GLOBAL ECONOMY FORECAST

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07-Jun-2022 00:04:05
World Bank issued a new forecast for the global economy, showing that global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than the 4.1 percent that was anticipated in January. WORLD BANK

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STORY: WORLD BANK / GLOBAL ECONOMY FORECAST
TRT: 3:59
SOURCE: WORLD BANK GROUP
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 7 JUNE 2022, WASHINGTON DC

SHOTLIST:

1. SOUNDBITE (English) Ayhan Kose, Director, Prospects Group, World Bank:
“Things have gotten unfortunately much worse than what we expected. We were expecting a slowdown. That slowdown is much more pronounced now. Growth is going to go down to 2.9 percent at the global level. Last year, it was 5.7 percent.”
2. Various shots, World Bank Group Headquarters
3. SOUNDBITE (English) Ayhan Kose, Director, Prospects Group, World Bank:
“What happened is that we downgraded forecasts across the board. In the case of advanced economies, forecasts were downgraded. In the case of emerging developing economies, forecasts were downgraded. And when you look at the global economy as a whole, we downgraded growth numbers for this year for 70 percent of countries relative to what we had in January.”
4. SOUNDBITE (English) Ayhan Kose, Director, Prospects Group, World Bank:
“Because of the war, we have a much larger menu of risks. And these risks, unfortunately, they mutually amplify each other. So the Russian invasion of Ukraine escalated geopolitical tensions. Of course, those geopolitical tensions can easily intensify. We have a very serious threat of stagflation, and that comes with higher interest rates. Higher interest rates come with the risk of financial stress. We still see supply disruptions. Because of the war, those supply disruptions are of course magnified. There is risks associated with an even larger food crisis down the road. And when you have these types of challenges, the risk of social tensions of course, increases.”
5. Various shots, World Bank Group Headquarters
6. SOUNDBITE (English) Ayhan Kose, Director, Prospects Group, World Bank:
“One issue is of course the intensification of geopolitical tensions. It has implications for commodity markets. Another one is the faster than expected tightening of financing conditions because of policy interest rates going up, and COVID related disruptions. When you put the three of them together, if those three risks materialize, we can easily find ourselves in the midst of a perfect storm. That type of storm will push the growth rate this year to 2%. And next year, at the global level, one-and-a-half percent. And when you have a growth rate at the global level around one-and-a-half percent, that means you are in a very serious, severe downturn.
7. Various shots, World Bank Group Headquarters
8. SOUNDBITE (English) Ayhan Kose, Director, Prospects Group, World Bank:
“At national level, the credibility of policies is obviously very important. Monetary policy, fiscal policy and financial policies. It starts with credibility when you are going through this type of difficult period. And of course, we are talking about slowing economies with elevated inflation. That means a calibration of policies. If there is fiscal space, that can be utilized, but it should be utilized in a manner that is targeted, well defined. If there is a revenue base, there is a need to expand that revenue base a bit further to generate revenue so you can actually help the segments of the society that need the most help.”
9. Various shots, World Bank Group Headquarters

STORYLINE:

World Bank today (07Jun) issued a new forecast for the global economy, showing that global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than the 4.1 percent that was anticipated in January. Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation. This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike. As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend.
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WORLD BANK GROUP
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unifeed220607d
Asset ID
2884233