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

The Washington-based institution has lowered its estimate for global growth in 2022 to 3.2% from a January prediction of 4.1%.

World Bank Warns of More Downgrades to Growth Outlook During ‘Exceptional Uncertainty’
The World Bank Group headquarters in Washington. (Photographer: Samuel Corum/Bloomberg)

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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.

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

“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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