The simultaneous rise in interest rates by central banks in the world to fight inflation reinforces the risk of a generalized recession in 2023, estimated on Thursday in world Bank.
Central bank benchmark rates increased by an average of 2% relative to 2021, but an equivalent increase may be needed to bring the inflation towards the objectives that are set, according to a study by the agency based in Washington.
An increase of this magnitude could generate a further decline in economic activity world, underlines the bank, with a growth of just 0.5% of GDP on the planet in 2023.
“Global growth is slowing sharply and will do so even more as more countries enter recession. My concern is to see this trend persist, with devastating long-term consequences for emerging and developing countries,” said the World Bank president, David Malpassit’s a statement.
In the publication of its global economic perspectives, at the beginning of June, the bank still forecast a growth of 3% in 2024 and a similar percentage in 2024, due to the war in ukraine.
“Globally we revised down the growth forecasts in all countries, with the exception of countries that export raw materials. And we lowered our estimates for the world economy by a third,” WB chief economist Indermit Gill told a news conference.
Despite this scenario, the World Bank calls on central banks to continue its efforts to reduce inflation, to avoid the socioeconomic risks that a constant rise in prices implies.
The bank calls for coordinated actions from monetary and budget policystrengthen logistics chains and avoid a fragmentation of the world economy.
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