The World Bank has warned that countries around the world are facing recession as the Ukraine war hits economies already devastated by the Covid pandemic,.
Less developed countries in Europe and East Asia face a “major recession”, it said. The risk of high inflation and low growth – so-called “stagflation” – is also higher, World Bank President David Malpass said. Energy and food bills have been rising around the world.
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” Mr Malpass said. He also warned in the World Bank’s Global Economic Prospects report for June that the danger of stagflation was “considerable”.
“Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer.”
Also on Tuesday, the World Bank approved $1.49bn (£1.2bn) of additional funding for Ukraine, which it said “will be used to pay for wages for government and social workers.”
The new financing is part of a more than $4bn support package for the country, which covers areas including healthcare, education and sanitation.
