World Bank Warns of More Downgrades to Growth Outlook During ‘Exceptional Uncertainty’

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World Bank Chief Economist Carmen Reinhart said the global economy is passing through a period of “exceptional uncertainty” and added that she wouldn’t rule out further downgrades to the growth outlook.

The Washington-based institution has lowered its estimate for global growth in 2022 to 3.2% from a January prediction of 4.1%, spurred by a cut in the outlook for Europe and central Asia that includes Russia and Ukraine. The new forecast compares with a 5.7% expansion in 2021.

“I think what’s really clear is that the risks lay on the downside,” Reinhart said in an interview with Bloomberg Television’s “Daybreak: Australia” on Tuesday. “The array of disruptions” from China’s Covid lockdowns to the impact on food prices of Russia’s war on Ukraine all point to that, she said.

Russia’s invasion of Ukraine -- a major grain producer -- shows no sign of ending, while China’s lockdowns to combat Covid are stressing supply chains and hurting the world’s No. 2 economy. 

“Will it be cut again?” Reinhart said of the World Bank’s forecasts. “Certainly wouldn’t rule it out. The point I’m making is we are living a period of exceptional uncertainty.”

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