The global economy is losing steam, with the cost of living stretching to over a two-decade high on supply chain disruption, according to the World Bank and the International Monetary Fund (IMF)
The two institutions said this as they revised the global economic outlook on Tuesday.
In its latest World Economic Outlook, IMF has projected the global output to slow this year to 3.6 per cent, from 6.1 per cent in 2021.
That is a downgrade from a January forecast of 4.4 per cent growth this year.
“Global economic prospects have been severely set back, largely because of Russia’s invasion of Ukraine,” Pierre-Olivier Gourinchas, the IMF’s chief economist said in a blog post.
The World Bank on other hand has slashed its forecast for global growth in 2022 to 3.2 per cent from 4.1 per cent, anticipating a sharp deceleration from the estimated growth of 5.5 per cent in 2021.
This is attributed to the rising cost of living across the globe, slow recovery from Covid-19 and Russia's invasion of Ukraine which has weakened the global supply chain.
"Severe overlapping crises" are weighing on the recovery,'' World Bank President David Malpass said.
Malpass added that developing countries, many of which are facing high levels of debt and a plunge in the value of their currencies, as well as soaring food prices, are of particular concern.
''Around the world, engines of growth are sputtering as prices rise and the war in Ukraine wreaks havoc on strained supply chains,'' World Bank boss said at the start of the World Bank/IMF Spring Meeting in Washington.
The global lender said that Europe which relies heavily on Russia to meet its energy needs is especially exposed.
According to World Bank, if supplies of Russian natural gas to Germany were suddenly cut off, Europe's biggest economy would lose a shocking $238 billion (Sh238.4 trillion) in economic output over the next two years.
In the United States, inflation has hit a level not seen in four decades.
This has forced the Federal Reserve to consider an aggressive pullback of its pandemic-era support for the economy, boosting fears that it could hike interest rates so much that it causes a recession.
In China, retail sales plunged 3.5 per cent in March from a year ago as tough lockdowns aimed at curbing the spread of Covid-19 weighed on activity in major hubs like Shanghai.
The global lender expects Sub Saharan Africa's growth prospects to slow to 3.6 per cent from last September's four per cent estimate.
