World Bank Projects Slow Growth, Warns of ‘Stagflation’ Risk

World Bank President David Malpass said that the danger of stagflation is considerable today. (Reuters)
World Bank President David Malpass said that the danger of stagflation is considerable today. (Reuters)
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World Bank Projects Slow Growth, Warns of ‘Stagflation’ Risk

World Bank President David Malpass said that the danger of stagflation is considerable today. (Reuters)
World Bank President David Malpass said that the danger of stagflation is considerable today. (Reuters)

The World Bank on Tuesday slashed its global growth forecast by nearly a third to 2.9% for 2022, warning that Russia's invasion of Ukraine has compounded the damage from the COVID-19 pandemic, and many countries now faced recession.

The bank forecast a slump in global growth to 2.9% in 2022 from 5.7% in 2021, a drop of 1.2 percentage points from its January forecast, and said growth was likely to hover near that level in 2023 and 2024.

The war in Ukraine had magnified the slowdown in the global economy, which was now entering what could become “a protracted period of feeble growth and elevated inflation,” the Bank said in its Global Economic Prospects report, warning that the outlook could still grow worse.

This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike.

In a news conference, World Bank President David Malpass said global growth was being hammered by the war, fresh COVID lockdowns in China, supply-chain disruptions and the rising risk of stagflation -- a period of weak growth and high inflation last seen in the 1970s.

“The danger of stagflation is considerable today,” Malpass wrote in the foreword to the report.

“Subdued growth will likely persist throughout the decade because of weak investment in most of the world,” he added.

“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.”

Between 2021 and 2024, the pace of global growth is projected to slow by 2.7 percentage points, Malpass said, more than twice the deceleration seen between 1976 and 1979.

The report warned that interest rate increases required to control inflation at the end of the 1970s were so steep that they touched off a global recession in 1982, and a string of financial crises in emerging market and developing economies.

It said global inflation should moderate next year but would likely remain above targets in many economies.

Growth in advanced economies was projected to decelerate sharply to 2.6% in 2022 and 2.2% in 2023 after hitting 5.1% in 2021.

Emerging market and developing economies were seen achieving growth of just 3.4% in 2022, down from 6.6% in 2021, and well below the annual average of 4.8% seen in 2011-2019.



Shipping Company Maersk Temporarily Pauses Haifa Port Calls

Israeli Air Force AH-64 Apache attack helicopters fly over Israel's northern city of Haifa on June 19, 2025. (Photo by Jalaa MAREY / AFP)
Israeli Air Force AH-64 Apache attack helicopters fly over Israel's northern city of Haifa on June 19, 2025. (Photo by Jalaa MAREY / AFP)
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Shipping Company Maersk Temporarily Pauses Haifa Port Calls

Israeli Air Force AH-64 Apache attack helicopters fly over Israel's northern city of Haifa on June 19, 2025. (Photo by Jalaa MAREY / AFP)
Israeli Air Force AH-64 Apache attack helicopters fly over Israel's northern city of Haifa on June 19, 2025. (Photo by Jalaa MAREY / AFP)

Container shipping company Maersk said on Friday it had temporarily paused vessel calls at Israel's Haifa port amid regional tensions.

The Danish company said it did not experience any further disruptions to its scheduled operations in the region.

Israel has been hitting Iran from the air since last Friday in what it describes as an effort to prevent Tehran from developing nuclear weapons.

Iran has denied plans to develop such weapons and has retaliated by launching counterstrikes on Israel.

On Thursday, Iran's Revolutionary Guards said it had launched combined missile and drone attacks at military and industrial sites linked to Israel's defense industry in Haifa and Tel Aviv.