WB 'Global Economic Growth Rate 5.6% This Year'... Warning of Recovery Gap Between Developed and Developing Countries

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The World Bank (WB) warned that while it projects the global economic growth rate this year to reach 5.6%, the highest since 1973, growth disparities among countries will widen.

On the 8th (local time), the WB presented a semi-annual global economic outlook report, revising the global GDP growth forecast for this year to 5.6%. This is 1.5 percentage points higher than the 4.1% forecast made in January.

The WB’s forecast was lower than the 6% global growth rate projection presented by the International Monetary Fund (IMF) in April.

The WB expects the world economy to grow 4.3% next year but estimates that global output will remain about 2% below pre-COVID-19 levels in 2022.

The WB assessed last year’s global economic growth rate at -3.5%.

By country, the US growth forecast for this year rose sharply by 3.3 percentage points from 3.5% in January to 6.8%. China is expected to grow by 8.5% this year. The Eurozone is projected to grow 4.2%, and Japan 2.9%.

The WB noted that inflation rebounded rapidly through April this year, surpassing pre-pandemic levels, and expects the global consumer price index (CPI) inflation rate to reach 3.9% this year, exceeding last year’s 2.5%.

The WB also expressed concern that recovery speeds will differ between advanced economies and developing countries.

It forecast that 90% of advanced economies, including the US, will recover to pre-pandemic levels by 2022, but only one-third of developing countries will do so. This was attributed to disparities in vaccine distribution.

The WB pointed out that if inflation is not properly managed, central banks in emerging markets may be forced to implement tighter monetary policies beyond appropriate levels to support economic recovery.

David Malpass, President of the WB, said, "There are encouraging signs that the global economy is recovering, but the COVID-19 crisis continues to impose poverty and inequality on people in developing countries worldwide."

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