WB sharply lowers global growth forecast for this year from 2.5% to -5.2%

WB "Worst Recession Since World War II"
East Asia and Pacific Region Growth Rate Forecasted at 0.5%

[Asia Economy Reporter Jang Sehee] The World Bank (WB) has revised its global economic growth forecast for this year downward by 7.7 percentage points from its previous projection to -5.2%. This adjustment reflects the prolonged impact of the COVID-19 pandemic, including weakened demand and reduced international trade volume.

According to the Ministry of Economy and Finance on the 9th, the WB released the 'Global Economic Prospects' report on the 8th (local time), which included these details. In its January forecast, the WB had anticipated a 2.5% growth rate.

However, the WB expects the global economic growth rate to reach 4.2% in 2021. The International Monetary Fund (IMF) projected growth rates of 3.0% for this year and 5.8% for next year in its April forecast.

The WB publishes the 'Global Economic Prospects' twice a year, in January and June. It does not release separate growth forecasts for South Korea.

The WB assessed the current economic situation as the worst recession since World War II and a downturn approximately three times steeper than the 2009 global financial crisis. This is because the COVID-19 crisis was triggered by a single factor: the pandemic.

Due to demand contraction from lockdown measures, reduced international trade, and increased financial market volatility, the WB projected growth rates of -7.0% for advanced economies and -2.5% for emerging and developing economies.

By region, East Asia and the Pacific, including South Korea, are expected to grow by 0.5%, affected by the contraction in tourism and low oil prices. This is the lowest figure since 1967.

Europe and Central Asia are forecasted at -4.9%. Latin America is projected at -5.8%, impacted by the collapse of tourism and weak commodity exports. The Middle East and North Africa are expected to see -4.4%, and Sub-Saharan Africa -2.7%.

Meanwhile, the WB emphasized in the report that "an active government role is essential to minimize economic shocks," recommending that "appropriate targeting of monetary policy and fiscal support to prepare for low growth and deflationary pressures is important."

This content was produced with the assistance of AI translation services.