Worldwide economic growth is expected to slow due to continuing COVID-19 pandemic, a reduction in government economic support and ongoing bottlenecks in global supply chains, the World Bank said in its Global Economic Prospects report released on Tuesday.
Despite an unexpectedly strong recovery last year, central banks are now reducing their support for economic growth and are considering raising interest rates to combat higher prices. Businesses have struggled to find raw materials and supplies to meet the consumer demand and, especially in the U.S., businesses have struggled to fill job openings.
The World Bank projected that the U.S. economy will grow 3.7 percent this year, down from 5.6 percent last year, while worldwide growth is expected to fall from 4.3 percent last year to 4.1 percent in 2022.
China, the world’s second-biggest economy, is expected to see growth decelerate from 8 percent last year to 5.1 percent this year.
The 19 European countries that share euro currency are expected to grow collectively 4.2 percent, down from 5.2 percent in 2021. Japan is expected to grow 2.9 percent, up from last year’s 1.7 percent.
Developing and emerging economies are estimated to grow 4.6 percent, down from 6.3 percent in 2021.
Since COVID-19 began, the World Bank has committed over $157 billion to fight the impacts of the pandemic, according to its website. Developing countries were approved $12 billion for the purchase and distribution of COVID-19 vaccines, tests and treatments. The COVID-19 Response Program was launched in April of 2020 to help investors tackle the pandemic, as well.
The arrival of the pandemic slammed global economic output and the world economy shrank by 3.4 percent in 2020.
The World Bank also approved a $20 million grant package as a part of its response project in 2021.
“The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory,” World Bank President David Malpass said.
The Associated Press contributed to this report.