Business

World Bank predicts 2% global economic growth for 2023

The World Bank has raised its January growth forecast from 1.7% to 2% in light of China’s lifting of COVID-19 restrictions and the stronger-than-expected performance of advanced economies.

In a meeting with the media yesterday, World Bank Group President David Malpass provided the forecast ahead of the Spring Meetings of the World Bank and International Monetary Fund (IMF).

The prediction was a sneak peek into the April World Economic Outlook, which was scheduled to be released this afternoon.

Malpass explained that the revisions to the upward projections are based on advanced economies performing “somewhat better than expected” in the first month of this year and China ending its lockdown policy.

The head of the World Bank stated that the United States’ gross domestic product (GDP) is anticipated to expand by 1.2% this year, as opposed to the 2.1% that was recorded the previous year.

The most recent banking stress, which, according to him, “dampens activity” and raises concerns about growth prospects, is one of growth’s drawbacks.

The banking crisis will be a major topic of discussion at the Spring Meetings, where stakeholders are expected to investigate the potential impact of failed banks on the global financial system.

The financial system’s stability and its ability to weather the storm in the face of prolonged economic challenges have been questioned in light of the back-to-back bank collapses in the United States and the rising tension in Switzerland.

Experts have urged central banks to prioritize financial system stability and slow or stop interest rate increases. However, the Federal Reserve System continued to raise interest rates at its March meeting despite expanding the liquidity line to save the banking sector.

The aggressive rate increase is already showing up in data all over the world, as evidenced by the labor market in the United States showing signs of weakness in March.

Nigeria’s maximum lending rate has surpassed 28%, and Nigeria’s monetary policy rate (MPR) has reached a multi-decade high of 18%.

Specialists said the loan cost would should be evaluated descending to give the confidential area headroom. Manufacturing and agriculture are the nation’s output growth albatross because credit to the real sector has stalled or grown at a snail’s pace over the past decade.

The bank cut Nigeria’s growth forecast in January from 2.9% to 2.9% because of the country’s rising risks and poor performance in key sectors like petroleum.

However, its sister organization, the IMF, increased its estimate of the country’s output growth from 3% to 3.2%.

Local economists predict that the country’s macroeconomic policies will undergo a significant shift following the leadership change next month, and that the sluggish growth of the past eight years may change significantly.

The Bretton Woods institutions have demanded extensive and bold reforms to the country’s inefficient power sector, rigid foreign exchange market, and unfriendly tax system, which are among the impediments to the country’s ability to accelerate growth.

This week, important financial and monetary authorities will attend the Spring Meetings to discuss the country’s progress in the reform process.
1 year ago
Adeyinka Arutu

Related Post

Recent Posts

Bobrisky’s Alleged Prison Scandal Sparks Major Controversy

Nigerian crossdresser, Okuneye Idris Olanrewaju, popularly known as Bobrisky, has become embroiled in a scandal following revelations about his brief…

1 day ago

Soludo Declares Free Education for All Public School Students in Anambra

Governor Chukwuma Soludo of Anambra State has introduced free education for all students in public primary and secondary schools across…

1 day ago

Federal Government to Revamp Six National Museums in Cultural Initiative

The Federal Government has unveiled plans to rejuvenate six national museums as part of efforts to safeguard Nigeria’s cultural heritage.…

2 days ago

EFCC Files New N110bn Fraud Charges Against Ex-Governor Yahaya Bello Amid Ongoing Money Laundering Case

The Economic and Financial Crimes Commission (EFCC) has filed fresh charges against former Kogi State Governor, Yahaya Bello, accusing him…

3 days ago

Nigeria’s Forex Market Surges to N15.74tn as Naira Faces Continued Depreciation

The value of foreign exchange turnover in Nigeria's Autonomous Foreign Exchange Market surged to N15.74tn ($9.90bn) in August 2024, according…

4 days ago

ASUU Issues 14-Day Ultimatum to Tinubu Government Over Unfulfilled Agreements

The Academic Staff Union of Universities (ASUU) has issued a 14-day ultimatum to the Nigerian government under President Bola Tinubu,…

4 days ago