Global growth is expected to decelerate markedly

Following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from novel coronavirus variants and a rise in inflation, debt and income inequality that could endanger the recovery in emerging and developing economies, according to the World Bank’s Global Economic Prospects report released recently.

Global growth is expected to decelerate markedly from 5.5 per cent in 2021 to 4.1 per cent in 2022 and 3.2 per cent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.

The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term. In addition, a notable deceleration in major economies—including the United States and China—will weigh on external demand in emerging and developing economies.