MNI: 'Pronounced Slowdown' Coming as Stimulus Fades-World Bank

Global economic growth faces a "pronounced" slowdown as the Omicron variant saps activity and policy stimulus is scaled back, the World Bank predicted Tuesday.

GDP gains will slow to 4.1% this year from 5.5% in 2021, and again to 3.2% in 2023, the Washington-based organization forecast in a Global Economic Prospects report. Slower growth in the U.S. and China will also have a knock-on effect on emerging markets and poorer nations, the report said.

“The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory," World Bank Group President David Malpass said.

The fastest global inflation since 2008 is forcing some nations to tighten monetary policy "well before the recovery is complete," and those nations are also struggling with disparities in distributing Covid vaccines, the World Bank said. "Elevated financial vulnerabilities in large swaths of the world could increase the risk of a hard landing."