Developing countries threatened by global economic threats, according to World Bank | Mondial economy

The risk of a hard landing for much of the global economy grows as countries struggle to cope with the triple threat of Covid-19, inflation and higher interest rates, the said. World fBank.

In its biannual forecast, the Washington DC-based bank said it expected a “sharp slowdown” in growth over the next two years, with the less affluent regions of the world particularly affected.

David Malpass, the president of the World Bank, called for action to reduce the debts of poor countries and said he was “very worried” about the permanent development scars caused by the pandemic. He said: “The global economy is simultaneously facing Covid-19, inflation and political uncertainty, with government spending and monetary policies in uncharted territory. Growing inequalities and security challenges are particularly damaging for developing countries.

With the Bank predicting growth to slow from 5.5% in 2021 to 4.1% this year and 3.2% in 2023, Malpass added: “Putting more countries on a favorable growth path requires concerted international action. and a comprehensive set of national policy responses.

The bank said the rapid spread of the Omicron variant suggested the pandemic would likely continue to disrupt economic activity in the near term, while a marked deceleration in the world’s two largest economies – the United States and China. – reduce exports from emerging and developing economies.

“At a time when the governments of many developing economies lack the political space to support much needed activity, new outbreaks of Covid-19, persistent supply chain bottlenecks and inflationary pressures, and high financial vulnerabilities in large parts of the world could increase the risk of a hard landing, ”the report said.

Malpass said many countries were already facing a ‘hard landing’ in education, noting that in poor countries the number of 10-year-olds unable to read simple text had increased from 53% to 70% over the past two years.

“Deep debt relief is needed,” said Malpass. “If we wait too long, it will be too late and it will not be successful. “

The Bank said growth in advanced economies is expected to rise from 5% in 2021 to 3.8% in 2022 and 2.3% in 2023 – a pace of expansion that would still be sufficient to restore production and investment. to their pre-pandemic trend. By the end of next year, all advanced economies are expected to have achieved a full recovery in production.

Growth in emerging and developing economies is expected to drop from 6.3% in 2021 to 4.6% in 2022 and 4.4% in 2023, leaving production 4% below its pre-pandemic trend. For fragile and conflict-affected countries, production would be 7.5% lower than its pre-pandemic trend, while in small island states, it would be 8.5% lower.

The Bank said rising inflation – which hits low-income workers particularly hard – was restraining monetary policy. “Globally and in advanced economies, inflation has reached the highest rates since 2008. In emerging and developing market economies, it has reached its highest rate since 2011. Many emerging economies and developing countries are withdrawing their political support to contain inflationary pressures – long before the recovery is complete.

At a time when immunization rates in the world’s poorest countries are below 10%, the World Bank has said the immediate priority is to ensure vaccines are rolled out more widely.

But he said long-term support was also needed to tackle setbacks in development progress, such as rising inequalities.

“In an era of high debt, global cooperation will be essential to help increase the financial resources of developing economies so that they can achieve green, resilient and inclusive development,” said Mari Pangestu, Executive Director of the Bank for Development Policy and Partnerships.