Publication: Global Economic Prospects, January 2023
Loading...
Files in English
191,354 downloads
16,103 downloads
6,534 downloads
3,266 downloads
Other Files
7,491 downloads
7,757 downloads
12,136 downloads
1,524 downloads
2,339 downloads
1,596 downloads
2,081 downloads
5,331 downloads
1,201 downloads
894 downloads
1,758 downloads
Published
2023-01-10
ISSN
Date
2022-09-16
Author(s)
Editor(s)
Abstract
Global growth is projected to decelerate sharply, reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine. Investment growth in emerging market and developing economies (EMDEs) is expected to remain below its average rate of the past two decades. Further adverse shocks could push the global economy into recession. Small states are especially vulnerable to such shocks because of the reliance on external trade and financing, limited economic diversification, elevated debt, and susceptibility to natural disasters. Against this backdrop, it is critical that EMDE policy makers ensure that any fiscal support is focused on vulnerable groups, that inflation expectations remain well anchored, and that financial systems continue to be resilient. Urgent global and national efforts are also needed to mitigate the risks of global recession and debt distress in EMDEs, and to support a major increase in EMDE investment.
Link to Data Set
Citation
“World Bank. 2023. Global Economic Prospects, January 2023. Global Economic Prospects. © World Bank. http://hdl.handle.net/10986/38030 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Russia Economic Report, No. 32, September 2014 : Policy Uncertainty Clouds Medium-Term Prospects(Washington, DC, 2014-09)Russia's economy is stagnating. Seasonally adjusted growth for the first two quarters of 2014 was near zero. Consumer and business sentiments were already weak in 2013 due to lingering structural problems and contributed to the wait-and-see attitudes of households and companies. Heightened market volatility and policy uncertainty due to geopolitical tensions during the first half of this year exacerbated this confidence crisis. The Russian economy needed to internalize several rounds of sanctions, countersanctions and measures to stabilize the economy; this environment of higher risk lowered domestic demand. While the macroeconomic stabilization measures were timely and successful, medium term policy objectives are still being defined. This continued policy uncertainty about the economic course of the country is casting a shadow on Russia's medium-term prospects. Prospects for further poverty reduction and shared prosperity are limited. In the past, rising wages and pension transfers allowed Russia to reduce poverty significantly and to expand the ranks of the middle-class. Unless structural reforms to expand the economy s potential are pursued, low investment makes it less likely that plentiful well-paying jobs will be created. High inflation, moreover, will slow real income growth and hurt consumption growth, dimming the likelihood for further poverty reduction and limiting the ability of the bottom 40 percent of the population to share in prosperity.Publication World Bank East Asia and Pacific Economic Update 2012, Volume 1 : Capturing New Sources of Growth(Washington, DC, 2012-05)Growth in developing East Asia and the Pacific remained strong in 2011, although it slowed from its post-crisis peaks. Strong domestic demand offset weaker external demand from the United States and Western Europe. Looking ahead, the external environment is likely to remain weak. The best prospects for the region to maintain high rates of growth, job creation, and poverty reduction are through rebalancing towards domestic demand and investing in productivity increases and further international integration. The region remains vulnerable to the continued uncertainty in Europe through trade and financial linkages. Although last December's fiscal pact and liquidity support from the European Central Bank helped stabilize financial markets, recent political events and market developments point to continued challenges. Renewed market volatility and a further slowdown in European economies cannot be ruled out. The European Union (EU), along with the US and Japan, accounts for over 40 percent of the region's direct export shipments and an estimated 60 percent if intraregional trade linked to production networks is taken into account. A serious disruption in the EU would also have knock-on effects on East Asia's exports and growth by lowering growth in other regions, particularly Eastern Europe. Moreover, European banks provide a third of trade and project finance in Asia. Policies to support the movement of labor among countries can contribute to higher productivity. Migration in developing East Asia has helped fill labor shortages in host countries and remittance flows have contributed to poverty reduction and macroeconomic stability in home countries. Yet, as in other parts of the world, existing bilateral and regional migration policies do not always allow migrants to move efficiently to where returns are highest or allow firms to obtain the workers they need, and these policies may contain incentives for undocumented migration. Improved regional migration policies could enhance the gains from regional economic integration and allow those countries facing a negative demographic drag on economic growth in the next generation to obtain much-needed labor inputs.Publication How Resilient Were Emerging Economies to the Global Crisis?(2011-04-01)This paper studies the cross-country incidence of the 2008-2009 global crisis and documents a structural break in the way emerging economies responded to the global shock. Contrary to popular perceptions, emerging market economies suffered growth collapses comparable, or even larger, to those experienced by advanced economies during the crisis. With such large financial and real shock, most of the world economy came to a halt when the crisis hit, with most countries resuming their pre-crisis growth rates afterwards. While emerging economies were not able to avoid the crisis collapse, they grew at a higher rate during the post crisis, relative to before and, as usual, to advanced countries. Moreover, emerging economies initiated their recovery sooner. Breaking with the past, emerging economies were able to conduct countercyclical policies, and became more similar to developed countries in softening the impact of the crisis and in their ability to pursue expansionary policies.Publication Russian Economic Report, April 2015(Washington, DC, 2015-04)Russia's economy experienced two shocks in 2014. On top of the structural crisis that began in 2012, Russia had to deal with cyclical and idiosyncratic challenges to the economy. One of the new shocks illustrates Russia s integration into the world economy through its natural resource exports, and thus its dependence on the global commodity cycle: oil prices more than halved between July and December 2014, giving Russia a terms-of-trade shock. The ruble lost 46 percent of its value against the US dollar, which worsened already eroded business and consumer confidence. The monetary tightening in response made credit expensive, further dampening domestic demand. The other, more idiosyncratic, shock was related to the geopolitical tensions that began in March 2014 and led to economic sanctions. The tensions not only heightened perceptions that Russian investments had become riskier, they also dramatically increased the costs of external borrowing for Russian banks and firms. Spreads on Russian credit default swaps peaked in December at 578 basis points, compared to 159 a year ago. Together with the financial sanctions imposed on Russia in late July, which have restricted the access of Russia s largest state-connected banks and firms to Western international finance markets, this all but extinguished investment. The current World Bank baseline outlook, however, sees the national poverty rate increasing from 10.8 percent in 2013 to 14.2 percent in 2015 and 2016. Poverty is expected to increase because real disposable income and consumption will decline. This would be the first significant increase in poverty rates since the 1998-1999 crises. Russia weathered the 2008- 2009 crisis well as disposable incomes continued to grow slightly. Given the current limited fiscal space, additional support for the poor and vulnerable is likely to be less generous than it was during the 2008-2009 crisis. Although people at the bottom of the income distribution are the most vulnerable, there will be less opportunity for an increase in shared prosperity in 2015-2016, and there is a worrisome possibility that recent achievements might be reversed.Publication Global Economic Prospects, January 2013(Washington, DC, 2013-01-15)More than four years after the global financial crisis hit, high-income countries struggle to restructure their economies and regain fiscal sustainability. Developing countries, where growth is 1-2 percentage points below what it was during the pre-crisis period, have been affected by the weakness in high-income countries. To regain pre-crisis growth rates, they will need to focus on productivity-enhancing domestic policies rather than demand stimulus. Although the major risks to the global economy are similar to those of a year ago, the likelihood that they will materialize has diminished, as has the magnitude of estimated impacts should these events occur. Major downside risks include the loss of access to capital markets by vulnerable Euro Area countries, lack of agreement on U.S. fiscal policy and the debt ceiling, and commodity price shocks. In an environment of slow growth and continued volatility, a steady hand is required in developing countries to avoid pro-cyclical policy and to rebuild macroeconomic buffers so that authorities can react in the case of new external or domestic shocks.
Users also downloaded
Showing related downloaded files
Publication People in a Changing Climate(Washington, DC: World Bank, 2024-11-12)This report is structured into three main parts, covering both new content and confirming key conclusions of the first two summary reports. First, it summarizes CCDR findings on the impacts of climate change on people and explores how putting people at the core of climate-development policies enhances their effectiveness and generates larger benefits. Next, it explores how people’s vulnerability and ability to transition toward resilient, low-emission development depend on key infrastructure systems, the energy, water, transport, and digital sectors, and highlights the potential benefits of green value chains and green minerals. Finally, it summarizes key conclusions on macroeconomic impacts, with a focus on the diversity of impacts across countries and the large investment needs, especially in lower-income countries. These findings confirm that, even with optimistic adaptation outcomes, large residual risks make GHG emission reductions urgent. The CCDRs illustrate how low- and middle-income countries (LICs and MICs) can contribute to this global objective without compromising on development progress and poverty reduction, with well-designed policies and enhanced support from higher-income countries.Publication The Human Capital Project(World Bank, Washington, DC, 2018-10-11)By improving their skills, health, knowledge, and resilience—their human capital—people can be more productive, flexible, and innovative. Human capital is a central driver of sustainable growth and poverty reduction. Investments in human capital have become more important as the nature of work has evolved. Yet despite substantial progress, significant gaps in human capital investments are leaving the world poorly prepared for what lies ahead. The World Bank Group has launched the Human Capital Project (HCP) to mobilize efforts to address these gaps. The project is intended to raise awareness of the costs of inaction and make the case for investing in people through country engagement and analytical work. The goal of the HCP is a world in which all children arrive at school ready to learn, the time spent in school translates into better learning, and they can grow up to live and work as healthy, skilled, and productive adults. The main text of this volume—which also appears as chapter 3 in the 2019 World Development Report: The Changing Nature of Work —describes the evidence supporting the importance of human capital for people, economies, and societies and lays out the rationale and context for the HCP’s theory of change. The Human Capital Index methodology is detailed in the appendix.Publication Distributed Ledger Technology and Blockchain(World Bank, Washington, DC, 2017)The financial sector is currently undergoing a major transformation, brought about by the rapid development and spread of new technologies. The confluence of ‘finance’ and ‘technology’ is often referred to as ‘Fintech’, typically describing companies or innovations that employ new technologies to improve or innovate financial services. ‘Fintech’ developments are seen across all areas of the financial sector, including payments and financial infrastructures, consumer and SMElending, insurance, investment management, and venture financing. This note on distributed ledger technology (DLT) and blockchains is part of a series of short notes that explore new trends and developments in Fintech and analyze their potential relevance for WBG activities. Forthcoming notes in this series will cover marketplace lending, ‘InsureTech’, and other topics. This note outlines the mechanisms, origins, and key characteristics of DLT; the difference between ‘public’ and ‘private’ DLT; the technology’s main advantages, challenges, and risks; relevant examples of DLT applications (with a focus on financial sector applications); and a brief overview of activities by governments, multilateral organization, and other stakeholders in this space. Finally, this note proposes next steps for the World Bank to study and evaluate areas where DLT could potentially be integrated into World Bank financial sector operations.Publication Global Economic Prospects, January 2024(Washington, DC: World Bank, 2024-01-09)Note: Chart 1.2.B has been updated on January 18, 2024. Chart 2.2.3 B has been updated on January 14, 2024. Global growth is expected to slow further this year, reflecting the lagged and ongoing effects of tight monetary policy to rein in inflation, restrictive credit conditions, and anemic global trade and investment. Downside risks include an escalation of the recent conflict in the Middle East, financial stress, persistent inflation, weaker-than-expected activity in China, trade fragmentation, and climate-related disasters. Against this backdrop, policy makers face enormous challenges. In emerging market and developing economies (EMDEs), commodity exporters face the enduring challenges posed by fiscal policy procyclicality and volatility, which highlight the need for robust fiscal frameworks. Across EMDEs, previous episodes of investment growth acceleration underscore the critical importance of macroeconomic and structural policies and an enabling institutional environment in bolstering investment and long-term growth. At the global level, cooperation needs to be strengthened to provide debt relief, facilitate trade integration, tackle climate change, and alleviate food insecurity.Publication Global Economic Prospects, June 2023(Washington, DC: World Bank, 2023-06-06)Global growth is projected to slow significantly in the second half of this year, with weakness continuing in 2024. Inflation pressures persist, and tight monetary policy is expected to weigh substantially on activity. The possibility of more widespread bank turmoil and tighter monetary policy could result in even weaker global growth. Rising borrowing costs in advanced economies could lead to financial dislocations in the more vulnerable emerging market and developing economies (EMDEs). In low-income countries, in particular, fiscal positions are increasingly precarious. Comprehensive policy action is needed at the global and national levels to foster macroeconomic and financial stability. Among many EMDEs, and especially in low-income countries, bolstering fiscal sustainability will require generating higher revenues, making spending more efficient, and improving debt management practices. Continued international cooperation is also necessary to tackle climate change, support populations affected by crises and hunger, and provide debt relief where needed. In the longer term, reversing a projected decline in EMDE potential growth will require reforms to bolster physical and human capital and labor-supply growth.