REVEALED: Global economy in ‘precarious position’, World Bank warns

High interest rates and the Russian war in Ukraine continue to significantly slow global economic growth, according to a new report from the World Bank.

Following growth of 3.1 per cent last year, the global economy would slow to 2.1 per cent in 2023, the World Bank said on Tuesday in its latest forecast.

The figure for 2023 was, however, 0.4 percentage points higher than an estimate released by the bank in January.

It is still one of the weakest growth rates in the past five decades, said the World Bank’s chief economist, Indermit Gill.

“The world economy is in a precarious position,’’ Gill said.

In 2024, the global economy should recover slightly and grow by 2.4 per cent, according to the report.

However, growth could also be lower than expected.

High global inflation is expected to decline gradually as demand eases and commodity prices weaken, the report said.

It could also lead to further tightening of monetary policy.

Widespread bank stress could lead to much weaker growth outcomes.

“It’s important to keep in mind that growth forecasts are not destiny,’’ World Bank President, Ajay Banga, said.

“We have a chance to turn the tide, but it will take us all working together,’’ he said.