Daily Management Review

Ukraine War Forces World Bank To Slash Global Growth


The Russian invasion of Ukraine has forced the World Bank to lower its prediction for global growth for 2022 by nearly a half a percentage point, to 3.2 per cent from 4.1 per cent, according to World Bank President David Malpass.
On a conference call with reporters, Malpass said that the World Bank was responding to the increased economic stresses caused by the Ukraine crisis as it is proposing a new $170 billion crisis financing objective for the next 15 months. The aim of this financing plan is to commit around $50 billion of that money in the next three months.
The biggest part of the bank's growth projection cut, according to Malpass, was a 4.1 per cent decline in the Europe and Central Asia region, which includes Ukraine, Russia, and neighbouring nations.
Food and energy costs have risen sharply as a result of war-related supply interruptions, causing forecasts to be lowered for advanced and many developing nations, according to Malpass.
On Tuesday, the International Monetary Fund is set to lower its global growth prediction.
"We're preparing for a continued crisis response, given the multiple crises," Malpass said. "Over the next few weeks, I expect to discuss with our board, a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023."
The strategy is based on a $160 billion World Bank COVID-19 funding package, of which Malpass said $157 billion has been committed until June 2021.
According to Malpass, the funding will help nations that have taken in Ukrainian refugees as well as those that are experiencing food shortages.
Malpass stated that World Bank and IMF member countries will meet this week to discuss further assistance for Ukraine, and that he expects a number of donor countries to make concrete promises.