Washington, US: The World Bank warned on 10th January 2023 that weaker growth in all three of the world’s largest economies including the United States, Europe, and China will bring the global economy “perilously close” to a recession this year.

The World Bank, which provides loans to less developed nations for development initiatives, stated in an annual report that it has nearly halved its earlier expectation for global growth this year from 3 percent to just 1.7 percent. If that prediction came true, it would rank behind only the severe recessions brought on by the 2008 global financial crisis and the 2020 coronavirus pandemic as the weakest yearly expansion in the past 30 years.

Despite the World Bank’s forecast that the US economy will grow by just 0.5 percent this year, the global economic downturn will undoubtedly be a further obstacle for US businesses and consumers, on top of rising costs and higher lending rates. If COVID-19 keeps growing or Russia’s conflict in Ukraine escalates, the US would also continue to be subject to additional supply chain disruptions.

Additionally, a weakened Chinese economy will probably hurt Europe, a long-time significant exporter to China. The World Bank report also mentioned how higher interest rates will draw capital from poorer nations, depriving them of essential domestic investment. Developed economies like the United States and Europe are examples of this. The paper added that at a time when Russia’s war with Ukraine has kept global food prices high, these high borrowing rates will hinder growth in wealthy nations.

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