Global Growth Expected to Slow and Hurt Developing Economies
The global economy had a strong initial rebound following the start of the pandemic. However, as the Omicron variant continues to rapidly spread, the economy is entering a slowdown phase, the World Bank reports.
"Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world," the report reads.
The deceleration in major economies, like the U.S. and China, will have a greater impact on emerging economies. And the gap between developing markets and advanced economies will only get wider, the Word Bank says.
"By 2023, all advanced economies will have achieved a full output recovery; yet output in emerging and developing economies will remain 4 percent below its pre-pandemic trend. For many vulnerable economies, the setback is even larger: output of fragile and conflict-affected economies will be 7.5 percent below its pre-pandemic trend, and output of small island states will be 8.5 percent below," the report reads.
"The choices policymakers make in the next few years will decide the course of the next decade," said Mari Pangestu, the World Bank's Managing Director for Development Policy and Partnerships. "In a time of high debt, global cooperation will be essential to help expand the financial resources of developing economies so they can achieve green, resilient, and inclusive development."