The world Bank cut his forecast global economic expansion this year due to invasion of Ukraine by Russia and plans to mobilize a larger funding package than the Covid-19 response for nations to deal with various resulting and ongoing crises.
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The Washington-based institution has lowered its estimate for global growth in 2022 to 3.2% from a projection of 4.1% in January, its president, David Malpass, said.
The drop was driven by a cut in prospects for Europe and Central Asia, which include Russia and Ukraine, he said.
The global forecast for this year compares with a 5.7% expansion in 2021, Malpass said.
(See: World economy will slow down due to war in Ukraine and inflation).
vThe head of the World Bank assured that he hopes to discuss a new 15-month crisis response package of around 170,000 million to cover, from April 2022 to June 2023, with the entity’s board in the coming weeks, deploying about 50,000 million dollars of this amount in the next three months.
“This is a continuous and massive response to the crisis given the continuation of the same“, he said, adding that the new initiative will exceed the 157,000 million dollars mobilized for the initial phase of the covid-19 pandemic.
Malpass’s comments and plans are brought forward to meetings of the International Monetary Fund and the World Bank that will take place this week in Washington, where will predominate food safety, the inflation, the debt and the impact of the Russian invasion of Ukraine.
The World Bank last month announced a $3 billion financing package for Ukraine that it hopes will be approved and rolled out in the coming months.
(See: Colombia, among the countries most affected by the rise in food, according to the IMF).
Malpass said he expects the debt crisis in low- and middle-income countries to worsen in 2022.
He said there has been slow progress on a plan by major economies to help debt-ridden developing nations restructure, with a total of $35 billion due this year.
“Countries are under severe financial stress: 60% of low-income countries are already overwhelmed by debt or at high risk of debtMalpass said, repeating the bank’s call to improve the so-called Group of 20 Common Framework for reordering the debt of countries in danger of default.
(See: Events that would ‘seriously’ affect world trade, according to the WTO).
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