Agency Report
The year 2022 has been reported by the World Bank as the second worst year for poverty reduction in two decades.
And as the fear of global economic lull spreads across the regions, the World Bank has warned that “even a moderate hit” could tip the global economy into recession in the coming year.
In the World Bank review of 2022, it said the global economy is in its steepest slowdown since 1970 and that “consumer confidence (is) already suffering a much sharper decline than during the run-up to previous global recessions.”
The report observes that the confluence of crises that defined the year has continued to hamper global growth.
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“The world’s three largest economies – the United States, China, and the euro area – have been sharply slowing. Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession,” it noted.
The fear of recession is a top economic theme across markets with investors bracing for a possible contraction of gross domestic products in the coming year. The economy has witnessed a restrictive monetary environment in the year with central banks across the globe insisting on going on with measures to rein in post-COVID inflation at any cost.
The World Bank report also highlighted the lingering impacts of COVID-19 on the survival of especially citizens of poor countries, saying the pandemic “dealt the largest setback to global poverty reduction efforts in decades” even as the recovery has been largely two-track.
It started: “By the end of 2022, as many as 685 million people could be living in extreme poverty — making 2022 the second-worst year for poverty reduction in the past two decades (after 2020).
“In addition to the lingering effects of the pandemic, rising food and energy prices – fueled by climate shocks and conflicts such as the war in Ukraine – have hindered a swift recovery. It is now projected that seven per cent of the world’s population – roughly 574 million people – will still struggle in extreme poverty in 2030 – far short of the global goal of three per cent in 2030.”
It also picked debt as one of the most debilitating crises the global community has had to contend with. It noted that the year has seen the debt crisis facing developing countries intensified, with 60 per cent of the poorest countries either in debt distress or at risk one.
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“Overall debt levels have increased for developing countries over the past decade, with some 60 per cent of the world’s poorest countries either in debt distress or at risk of it.
“Over-encumbered with debt, the world’s poorest are not able to make critical investments in economic reform, health, climate action, or education – among other key development priorities. Perhap more significantly, the composition of debt has changed dramatically since 2010, with private creditors playing an increasingly larger role,” it noted.
Other issues highlighted by the report are food, climate change and the energy crisis, which have kept leaders awake throughout the year.
