World economy will not have a tangible recovery in 2023

The world economy will not have a tangible recovery in 2023, according to forecasts by the World Bank and the World Trade Organization (WTO).

First and foremost, the World Bank’s latest World Economic Outlook forecasts global growth to slow to 2.9% in 2022, down from 5.7% in 2021. This is 1.2 percentage points lower than the 4.1% forecast in January.

From the WTO’s perspective, a tangible recovery is not expected in 2023, as global growth forecasts put it at 3%, mainly due to the fact that commodity prices are expected to remain high and monetary policy tightening will persist.

According to the report, the war in Ukraine, which has compounded the damage caused by the Covid-19 pandemic, has added to the slowdown in the global economy, which is entering a period of weak growth and high inflation (stagflation).

World economy

Over the past 10 years, the frequency and intensity of conflicts, climate variability and extreme weather events, as well as economic slowdowns and contractions, have increased, undermining food security and nutrition worldwide.

Indeed, the increased incidence of these phenomena, exacerbated by the pandemic, has led to an increase in hunger and undermined progress in reducing all forms of malnutrition, particularly in low- and middle-income countries.

In 2021, at least 193 million people were acutely food insecure-an increase of 38 million people since 2020 and the highest level in six years-and 53 countries or territories requested external assistance.

The Covid-19 pandemic and measures to contain its spread have caused a deep global economic recession, eroded incomes and livelihoods, and affected people’s ability to buy food.

On the supply side, the pandemic affected food security through border closures, travel restrictions, quarantines, and market, supply chain and trade disruptions.

This, along with other factors, led to between 720 million and 811 million undernourished people by 2020, according to the WTO.

Risks

After remaining virtually unchanged for five years, in 2020 the prevalence of undernourishment increased by 1.5 percentage points to almost 9.9%, causing setbacks on the path to achieving the “Zero Hunger” Goal by 2030.

Today, the world faces numerous challenges and interconnected risks.

Among them, the WTO cites: high and volatile prices for food, agricultural inputs (especially fertilizers) and energy; logistical bottlenecks, for example, in the Black Sea, due to the war in Ukraine; production risks, which affect most food commodities; climate change and the degradation of natural resources and ecosystems; and the increased frequency and intensity of disasters and other shocks.

In addition, as a consequence of the war in Ukraine, the International Monetary Fund (IMF) lowered its global economic growth forecasts to 3.6% in 2022 and 2023, representing a downward revision of its previous forecasts by 0.8 and 0.2 percentage points, respectively.

 

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