MNI: World Bank Sees Potential Double-Dip Recession This Year

The global economy may be one shock away from another recession following the one brought on by Covid, the first time in more than 80 years with two downturns in the same decade, the World Bank said Tuesday.

Euro-area output will stall this year and the U.S. will grow just 0.5% for its weakest expansion outside of a recession since 1970 according to the Global Economics Prospects report. Both regions were marked down almost 2 percentage points from six months earlier. China's growth forecast was reduced almost a percentage point to 4.3%.

Excluding China, growth in emerging market and developing economies is expected to slow from 3.8% in 2022 to 2.7% in 2023. Global growth for 2023 was slashed to 1.7% from 3%.

"Any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions—could push the global economy into recession," the Bank said. Some experts warn central-bank rate hikes may drive economies into recession. (See MNI INTERVIEW: BOC Can Halt Rate Hikes Now: Union Leader)