The Global World Development Agency lowers its growth potential for the world economy to 1.7% for 2023. Warning of the World Bank to know the worst economic situation
The world economy is under a very critical condition as the World Bank has recently withdrawn its global growth forecast from its mid-2022 forecast. Considering it as a warning from from the World Bank to know about the world’s worst recession.
The International Development Agency has cut almost all of its forecasts for the world’s developed economies, reducing its growth potential for the world economy to 1.7% for 2023 according to the report Global Economic Prospects and recently. The institute predicts that the world economy will increase by 3% in 2023. The decline in growth forecasts that led to the global slowdown will also affect the global crypto market to some extent.
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Declining Predictions for the Developed Economy in the Crypto world
The international banking reform is a major downfall in the US economic outlook due to high inflation and high interest rates. Now, a new forecast calls for growth of 0.5% compared to an earlier projection of 2.4%.
Second, the World Bank cut growth for one of the world’s largest economies like China for 2023 from 5.2% to 4.3%, while Japan from 1.3% to 1%. Europe and Central Asia seem to be experiencing a real decline of 1.5% to 0.1%.
The effects of inflation and high interest rates have also affected investment in crypto projects and there may be a drop in crypto investment volume. Crypto regulations must be reformed to bring the global economy back into balance. However, until now, there have been no reports or statements issued by the world’s leading companies regarding crypto.
Tightening Monetary Policy to Control Inflation
According to the World Bank, global growth has slowed to the point that the economy is considerably close to falling into the trap of global recession. This is ultimately attributed to a rapid and unexpected tightening of global monetary policy behind the sluggish growth.
The projected decline would mark the third lowest level in three decades. It was caused by the global recession caused by the pandemic and the global recession. To bring inflation under control, the World Bank believes that tighter monetary policies by central banks around the world may be necessary. The problem is that they have contributed to the decline of the global economic situation, which has greatly reduced employment.
Not only the United States, but the European district, China continues to go on all the time of weakness. The failure causes other winds that make other wounds appear in economic development. The International Monetary Fund also revised its forecast for 2024, to 2.7% from the previous forecast of 3% annual growth.
China’s Important Role in Economic Recovery
In recent international recession news, China’s faster-than-expected expansion has brought great uncertainty to its economic recovery. Considering that the restart has caused a large epidemic in the health sector, it would not be wrong to think that the economic recovery in China may be delayed. Along with this, there is a risk of uncertainty about the epidemic and the reaction of businesses, households and policy makers in China.
Last Tuesday, the President of the World Bank David Malpass said on CNBC that China’s work was described as an important change and it could be a step forward for China if they manage to overcome Covid as quickly as they are doing. China has always been seen as big enough to drive global demand and supply. One of the important questions for the world in the future would be what to do more if there is mainly upward pressure on global demand, which leads to higher commodity prices .
Conclusion
Now that the world is already in a very vulnerable position, there should be no leeway to delay the changes needed to get things back to normal after the global recession. There is an urgent need for significant reforms to strengthen and improve prospects and build a strong economy and strong private sector.
