Global Economic Prospects: WB forecasts slowest global economic growth in over three decades.

“The crisis facing development is intensifying as global growth prospects deteriorate,” said David Malpass, president of the World Bank Group. “Emerging and developing countries will face several years of slow growth,” he said in a press release.

David Malpass forecasts slowest global economic growth in over three decades | DW News, https://youtu.be/JKn1XKGzUtI.

The global economy will come "perilously close" to a recession this year, led by weaker growth in all the world's top economies – the United States, Europe, and China – the World Bank warned on Tuesday.

In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth this year by nearly half, to just 1.7%, from its previous projection of 3%. 

 

If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.

The international economic outlook looks complicated and Latin America is no exception: after Europe, it is the region that will grow the least in the world in 2023, according to World Bank forecasts.

In its most recent report "World Economic Outlook" released on Tuesday, the World Bank forecasts that the world economy will grow 1.7% this year and 2.7% in 2024. For Latin America, it estimates that growth will slow markedly to 1 .3% in 2023, less than half the 3.6% in 2022, to recover to 2.4% next year.

The forecast for the region represents a downward revision with respect to the World Bank forecasts for June 2022. At that time, it was estimated that Latin America would grow this year by 1.9%, that is, 0.6 percentage points more than the current forecast.

The forecasts were revealed at a time when there is high inflation, rising interest rates, reduced investment, and an impact from the Russian invasion of Ukraine.

The region faces a wide range of challenges: due to its trade links, it is exposed to the slowdown in advanced economies and the weakening of China, which will reduce the rise in exports.

In addition, lower commodity prices and tightening financial conditions are expected to impact investment, coupled with persistent inflation, which "remains a major problem," Philip George Kenworthy, an economist, told The Associated Press. of the World Bank.

 

Among the largest regional economies, the World Bank expects Brazil to grow 0.8% in 2023, Mexico 0.9%, and Chile to contract 0.9%, mainly due to the effect of monetary policies implemented to curb inflation. In addition, the three countries will negatively feel the slowdown of large trading partners such as the United States and China.  

 

Chile also faces challenges related to the prices of raw materials because it exports metals and imports energy, explained the World Bank economist. Metal prices are expected to fall more this year than energy prices. In Argentina, meanwhile, growth would fall to 2%, in Colombia to 1.3% and in Peru to 2.6%.

 

Guyana to sustain double-digit growth:  The World Bank has said that Guyana will continue to record positive economic growth over the next two years, even as the Latin America and Caribbean region experiences a slowdown in economic progress

 

The economy of Guyana is one of the fastest growing in the world with a gross domestic product (GDP) growth of 19.9% in 2021. In 2022, Guyana had a per capita gross domestic product of $42,647 and an average GDP growth of 4.2% over the previous decade.  Guyana is the only South American nation in which English is the official language.

 

The World Bank in Panama: Growth forecast is expected to drop from 15.3 percent in 2021 to 6.2 in 2022 and 4.5 percent in 2023 and in 2024.  Panama is located in Central America, bordering both the Caribbean Sea and the Pacific Ocean, between Colombia and Costa Rica.

 

Costa Rica growth is expected to moderate to 3.3 percent in 2022 and 2.9 percent in 2023, reflecting the challenging external environment but should rebound to around 3.2 percent in 2024 supported by Costa Rica's dynamic exporting sectors.

 

Nicaragua growth is projected to moderate to 4.1 percent in 2022 and to slow further to 2.0 percent in 2023, consistent with a global economic deceleration https://www.worldbank.org/en/news/press-release/2023/01/10/global-economic-prospects.

San Jose Costa Rica, Thursday, January 12th, 2023, alberto.doer@gmail.com.  Rafael A. Vilagut-Vega, Digital Entrepreneur, Author, Researcher, Educator, Coach, Teacher. He lives and works between Caracas (Venezuela), Barcelona and Madrid (Spain) and Central America Panama, Costa Rica, and Nicaragua, https://ucr.academia.edu/RafaelVilagut/CurriculumVitae.