World Bank downgrades 2023 global growth forecast to 1.7%

Global economic growth is projected to slow to 1.7 per cent in 2023, 1.3 percentage points below the forecast made in June last year, marking its third-weakest pace in nearly three decades, the World Bank Group said in its latest Global Economic Prospects report.

Given such adverse shocks as high inflation, rising interest rates, sluggish investment and the Russia-Ukraine war, global growth has slowed "to the extent that the global economy is perilously close to falling into recession", Xinhua news agency quoted the report as saying.

The downgrade reflected "synchronous policy tightening aimed at containing very high inflation", as well as deteriorating financial conditions, declining confidence and energy supply disruptions, it said.

Noting that the adjusted global growth forecast is overshadowed only by the 2009 and 2020 global recessions, the report said in 2024, the global economy is on track to grow by 2.7 per cent.

More specifically, the report said that growth for advanced economies is projected to slow to 0.5 per cent in 2023, 1.7 percentage points below the June forecast.

US economic growth forecast for this year has been downgraded by 1.9 percentage points to 0.5 per cent, the weakest performance outside of recessions since 1970.

The Eurozone economy is projected to grow at 0 per cent, down 1.9 percentage points from the previous forecast.

Meanwhile, the report said that growth for emerging and developing economies is projected to slow to 3.4 per cent in 2023, 0.8 percentage points below the June forecast.

It added that global trade volume will grow 1.6 per cent this year, down 2.7 percentage points from the previous forecast.