Eurozone economic growth is likely to stall this year as prices have risen across the board, coupled with higher interest rates, lower investment and disruption due to the war in Ukraine. That’s what the World Bank is predicting, which has gotten much gloomier about the global economy as a whole in the new estimates.
The world’s largest development cooperation agency now predicts zero growth for the euro area. In the previous estimate of June last year, a plus of 1.9 percent was forecast. Economic growth in the US will also decline sharply, it is expected. The World Bank currently holds a plus of 0.5%.
High growth in emerging markets
All in all, the UN agency downgraded its forecast for 95% of developed economies. In emerging markets and developing countries, growth is likely to be slightly higher, but even the figures for this group are lower than previously estimated at almost 70% of cases.
According to the World Bank, the world economy as a whole is likely to show only 1.7% growth this year, followed by a 2.7% increase in 2024. Bank experts think inflation will not stay extremely high indefinitely, but moderate-willed at some point. But for now, the pace of price hikes will clearly remain higher than usual before the coronavirus pandemic.
Serious concern
The report also provides a first comprehensive assessment of the medium-term outlook for investment in emerging markets and developing countries. The World Bank believes they are likely to grow only 3.5% on average through 2024. This is less than half the growth rate that has been normal for the past two decades.
The latter could very well become a big deal, thinks World Bank economist Ayhan Kose. He speaks of a “serious concern” because the investment restriction often does not bode well for trade and productivity, so the broader outlook is not so rosy. “Without strong and sustained investment growth, it is simply impossible to make meaningful progress towards broader, climate-related development goals,” warns the economist.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
