The global economy is likely slowing sharply this year, hobbled by high interest rates, the repercussions of Russia's invasion of Ukraine and the lingering effects of the coronavirus pandemic.
That's the latest outlook of the World Bank, a 189-country anti-poverty agency, which estimates that the international economy will expand just 2.1% in 2023 after growing 3.1% in 2022.
“By the end of next year, a third of the developing world will not meet the per-capita income level that they had at the end of 2019,” he said. The Federal Reserve and other major central banks have been aggressively raising interest rates to combat a resurgence of inflation, set off by a stronger-than-expected rebound from the pandemic recession, persistent supply shortages and energy and food price shocks caused by the Ukraine war.
The United States has continued to generate unexpectedly robust job gains — employers added 339,000 workers in May, far more than economists had forecast — even though the Fed has raised its benchmark rate 10 times in the past 15 months. In its report Tuesday, the World Bank upgraded its forecast for U.S. economic growth this year to 1.1%. Though weak, that is more than double the growth the World Bank had envisioned in January.
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