“The overall growth has slowed to the point that the Global economy this dangerously close of falling into recession”.
Thus sentences the world Bank its gloomy projection for this 2023just three years after emerging from the 2020 pandemic-induced recession. It estimates global growth will slow from the 3% forecast six months ago to 1.7%.
Despite the gloomy outlook, the agency projects that, among the largest economies in the Caribbean, the growth of the Dominican Republic average “a solid 4.9 percent in 2023 and 2024”. The percentage is slightly higher than the 4.6% forecast by the Economic Commission for Latin America and the Caribbean (Cepal).
Meanwhile, for Haiti the world Bank expects its economy contract for the fifth year consecutive this year.
“Continue to be harassed by the violence and instabilitywith almost one in five children suffering from chronic malnutrition”, says the bank about Haiti in its most recent report on global perspectives released yesterday.
global challenges
By 2023, the world Bank notes that, “given the fragile economic situation, any new adverse event – such as a higher inflation than expected, abrupt increases in interest rates to contain it, the resurgence of the pandemic COVID-19 or the intensification of geopolitical tensions– could push the world economy into recession”.
He anticipates that it would be the first time in over 80 years that occur two global recessions in the same decade. When it refers to recessiondefines it as a contraction in annual global per capita income.
It highlights that the three main engines growth markets in the world (the United States, the euro area and China) are going through a period of weakness pronounced.
“Very high inflation has triggered an adjustment in the monetary politics unexpectedly fast and synchronous across the globe to contain it, including in major advanced economies,” the bank says. “Although this tightening has been necessary for price stability, it has contributed to a significant worsening of world financial conditions.
In Latin America
The world Bank indicates that it is expected marked slowdown of growth in Latin America and the Caribbean to 1.3% in 2023, to recover a little, to 2.4%, in 2024.
“It is expected that with the somewhat slow growth of United States and China demand for exports is reduced, while the increase in US interest rates is likely to mean that financial conditions will remain tight,” he says.
To face a drop in investment, it suggests priorities. In countries with acute fiscal stress, may be to improve the efficiency of spending on public investment; in those with anemic private investment, would be the reform of the business climate, to encourage private investment; and in which there are large foreign direct investmentTherefore, improve human capital to ensure that such investment improves growth.
