Numerous investors, bankers and entrepreneurs have discussed the topic of a possible coming recession for the past few months given the current situation of the world.
Well now the World Bank is joining in on the topic and warning that there may be something even more terrifying on the horizon: years and years of minimal growth as well as continued rise in prices.
The announcement came that the global growth of the economy is expected to fall 2.9%, which is a significant decrease of 1.2% from what was previously forecasted.
The World Bank warned that alarms are going off for a “protracted period of feeble growth and elevated inflation.”
Both inflation and slow growth are putting world economy at risk … @WorldBank has cut its 2022 forecast from 4.1% in January, to 3.2% in April, to 2.9% most recently, amid surge in food & energy prices, supply disruptions and central banks’ tightening
@Bloomberg pic.twitter.com/AJ9ymUTadh— Liz Ann Sonders (@LizAnnSonders) June 8, 2022
Liz Ann Sonders, Chief Investment Strategist for Charles Schwab said:
“Both inflation and slow growth are putting world economy at risk.”
Global inflation continues to increase to record breaking highs, which, according to the World Bank, is caused by supply chain shocks, elevated demand from opening economies after the pandemic, as well as the Russian invasion of Ukraine.
The report shared that inflation will peak sometime in the middle of 2022 before it drops to around 3% by the middle of 2023, highlighting the progression of surging energy, rising food costs, and heightened interest rates from central banks.
“The global outlook faces significant downside risks, including intensifying geopolitical tensions, an extended period of stagflation reminiscent of the 1970s, widespread financial stress caused by rising borrowing costs, and worsening food insecurity.”
100% of Advanced economies and 80% of Emerging and Developing countries are now experiencing above-target inflation, the World Bank report stated.
The World Bank reports 100% of Advanced economies, and 80% of Emerging and Developing countries now experience above-target inflation. At the same time WB cuts global GDP forecast to +2.9%. (Down from +3.2%)
That means: GLOBAL STAGFLATION.
ht #JimPerry pic.twitter.com/12ZPpmEmkT— Ronnie Stoeferle (@RonStoeferle) June 8, 2022
The Gateway Pundit added:
The World Bank also downgraded growth prospects for the United States in 2022 to 2.6% from the 3.8% it predicted in January.
The World Bank advised governments to soften the blow from soaring energy and food prices. The group suggested easing financial burdens by expanding debt relief.
The World Bank report cautioned that if geopolitical conditions do not begin to improve, “global growth could be substantially weaker.”
This warning is nothing new, as recently the CEO of JPMorgan Chase also expressed concerns for the future of the global economy and warned that his firm is bracing for an economic “hurricane.”
Source: Thegatewaypundit
