(Bloomberg) The World Bank projects a global growth of 3.2% this year, down from an earlier prediction of 4.1%.
The World Bank cites impacts emanating from the Ukrainian war as the reason for the downgraded growth forecast.
The global institution expects to mobilize a funding package bigger than during Covid-19 due to the resulting impacts. The bank is discussing a new 15-month crisis-response funding of around $170 billion to last up to June next year, exceeding $157 billion during the initial phase of Covid-19 pandemic.
World Bank President David Malpass says around $50 billion of the funding will be deployed in the coming three months. This comes after the bank announced $3 billion funding for Ukraine last month, which is expected to be approved and deployed soon.
Malpass further said that the debt crisis in low and middle-income nations will worsen this year. He attributes the crisis to slow progress by the biggest economies to restructure the loans for the debt-ridden lower-income countries.
The World Bank chief said countries are facing severe financial stress, with about 60% of lower-income ones already in debt distress or facing one.
The comments by the World Bank come ahead of its meeting with the IMF, in which debt, shock from the Ukrainian war, food security, and inflation will take center stage.
The expected growth is lower than an expansion of 5.7% witnessed in 2021 in the wake of accelerated recoveries from the Covid-19 pandemic.
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