The new emerging Covid-19 variants and a rise in inflation, debt and income inequality will cause a drop in overall global GDP from 5.5 per cent in 2021 to 4.1 per cent in 2022, a World Bank report said.
The World Bank's latest report, Global Economic Prospects, says after a strong rebound in 2021, the global economy will face slowdown as the threat of new Covid variants, rising inflation, global debt and income inequality will pose hurdles in the economic recovery.
"The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly harmful to developing countries," said World Bank Group President David Malpass.
Also read: World Bank sees India's GDP growing at 8.3% in FY22, upgrades FY23 forecast
He added that it'll require “concerted international action" and thorough national policy measures to put the global economy back on the growth path.
The World Bank on Tuesday retained its forecast for India's GDP growth for FY22 at 8.3 per cent, according to its global economic prospectus report. Further, the Washington-based agency has upgraded its forecast for FY23 and FY24 at 8.7 per cent and 6.8 per cent respectively.
The World Bank's projections come after India's government advance estimates projected India's GDP to grow at 9.2 per cent in the current financial year ending March 2022.
The global agency further its forecasts for economic growth in the United States, the Euro area and China and warned that high debt levels, rising income inequality and new Covid-19 variants threatened the recovery in developing economies.
With ANI inputs
