The global economy is at risk of falling into a 1970s-style “stagflation” trap, the World Bank has warned, as it slashed its growth forecasts and raised the alarm over growing sovereign debt defaults.
In its first economic outlook since the war in Ukraine, the World Bank said Russia’s invasion, surging energy prices and a slowdown in China would “hammer” economic growth in the years to come.
The Washington-based bank slashed its global growth forecast from a 4.1 per cent GDP projection made in January to 2.9 per cent this year, down from 5.7 per cent GDP growth in 2021, when the world economy rebounded from Covid-19 lockdowns.
The 1970s were marked by the energy crisis of 1973 and the “stagflation” that crippled the world’s major economies
MARTY LEDERHANDLER/AP
“For many countries, recession will be hard to avoid,” David Malpass, World Bank president, said, adding that on
