World Bank Lowers Global Economic Growth Forecast for This Year from 4.1% to 3.2%

David Malpass, President of the World Bank
Photo by Reuters Yonhap News

[Asia Economy New York=Special Correspondent Joselgina] The World Bank (WB) has lowered its global economic growth forecast by nearly 1 percentage point this year, expressing concerns over the impact of Russia's invasion of Ukraine.

According to economic media CNBC and others, David Malpass, President of the World Bank, announced on the 18th (local time) during a conference call that the global economic growth forecast for this year has been revised from 4.1% to 3.2%.

President Malpass explained that the sharp economic contraction of 4.1% expected in Europe and Central Asia was a major reason for this downward revision. He also cited the surge in food and energy costs as a concern for global economic growth. Analysts attribute this largely to Russia's invasion of Ukraine and the Western sanctions against Russia.

On the same day, U.S. natural gas futures prices at the New York Mercantile Exchange surpassed $8 per million BTU during trading, reaching the highest level in 13 years since September 2008. This is due to European countries expanding their demand for U.S. natural gas to reduce dependence on Russian energy. Corn futures prices exceeded $8 per bushel for the first time since September 2012. President Malpass pointed out, "The surge in energy and food prices caused by the war and worsening supply disruptions will hinder economic growth not only in emerging countries but also in advanced economies."

Along with this, President Malpass stated, to respond to the economic crisis caused by the war, the World Bank plans to operate a financial program worth $170 billion (approximately 210 trillion KRW) over 15 months from this month until June 2023. This is larger than the $160 billion program previously operated by the World Bank for COVID-19 relief.

President Malpass said, "We will discuss the next phase of financial support measures for Ukraine's reconstruction at this week's IMF and World Bank Spring Annual Meetings." Earlier this month, the World Bank forecasted that Ukraine's annual Gross Domestic Product (GDP) would decrease by 45.1% this year. It also predicted that Russia's GDP would shrink by 11.2% due to the impact of Western sanctions.

The International Monetary Fund (IMF) is also expected to announce revised global economic forecasts, including for South Korea, at the IMF and WB Spring Annual Meetings held on the 19th. Earlier in January, the IMF projected global and South Korean economic growth rates of 4.4% and 3.0%, respectively, for this year. Recently, IMF Managing Director Kristalina Georgieva indicated plans to lower growth forecasts for 143 countries due to the impact of the Ukraine crisis. South Korea's growth forecast is also expected to be lowered to the 2% range.

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