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

World Bank Warns of Global Recession, Stagflation — "This Is the Sharpest Slowdown in 80 Years"

The World Bank has warned of a possible global recession. “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 on Global Recession, Stagflation

The World Bank warned about the rising risk of stagflation and global recession Tuesday. World Bank President David Malpass said: The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid.

“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.

The World Bank president clarified on Bloomberg Tuesday that we are not in a global recession yet. 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: This is the sharpest 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.”

The Bank also warned about stagflation, stating that the danger of stagflation is considerable. In addition, inflation and slow growth may persist for years, the World Bank noted.

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.” Tags in this story developed countries, global recession, poor economies, Recession, World Bank, World Bank president

What do you think about the comments by World Bank President Malpass? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. American Economists Are Baffled by an "Unusual Situation" as Russia"s Ruble Is the World"s Best Performing Fiat Currency ECONOMICS | 4 hours ago Nobel Laureate Paul Krugman Compares Crypto to Housing Bubble and Subprime Crisis ECONOMICS | 1 day ago

Image Credits: Shutterstock, Pixabay, Wiki Commons, DCStockPhotography Previous articleCitadel, Charles Schwab, Fidelity Join Forces to Build Cryptocurrency Trading Platform Next articleAmerican Economists Are Baffled by an ‘Unusual Situation’ as Russia’s Ruble Is the World’s Best Performing Fiat Currency Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"

The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Following a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days Fidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand" Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade