The World Bank lowered its annual forecast by global growth for 2022 by almost a full percentage point, from 4,1% to 3,2%, citing the pressure the Russian invasion of Ukraine has placed on the global economy. To ward off a fragmentation of economies, the institute plans to mobilize a $170 billion funding package, larger than the $19 billion package deployed for Covid-157, to help its members deal with various ongoing crises.
The Washington-based institute lowered its estimate. The decline was spurred by a cut in prospects for Europe and Central Asia, which include Russia and Ukraine, the president said David malpass to reporters in a call on Monday, April 18. Weighing too price increases related to geopolitical tensions and the Covid in China. The global forecast for this year compares with a 5,7% expansion in 2021, Malpass pointed out.
In the coming weeks, the head of the World Bank said he expects to hold discussions with the bank's board new funding package to 15 months in response to the crisis, worth approximately $170 billion to cover the period from April 2022 to June 2023, with approximately $50 billion of this amount to be deployed over the next three months. The new package would help address the refugee crisis, economic and trade tensions and food insecurity. "This is a continuous and massive response to the crisis, given its persistence," said the number one of the World Bank, adding that the new initiative will exceed the 157 billion dollars mobilized for the initial phase of the Covid-19 pandemic.
In addition, the Bank last month announced a $3 billion loan package for Ukraine that it expects to be approved and distributed in the coming months. For now, it has already paid 600 million dollars out of the initial billion promised in Kiev and work is underway to collect the rest.
World Bank: "Dangerous debt for the poorest countries"
Malpass's comments and plans come ahead of the spring meetings of the International Monetary Fund and the World Bank taking place this week in Washington, where food security, inflation, debt and the shock of the invasion are in the foreground Russian of Ukraine. According to the Financial Times, the IMF could also revise the growth estimates of the majority of countries.
Malpass said he expects the debt crisis of low- and middle-income nations in 2022. “Countries are under severe financial stress – 60% of low-income countries are already in trouble or at high risk of debt,” Malpass highlighted, repeating the bank's call for improve the so-called Common Framework of the Group of 20 rich countries to reorganize the debt of countries in danger of default.
