According to the world bank report, the new emerging COVID-19 variants lead to rising inflation, debt, and income inequality and cause a drop in overall GDP to 4.1% in 2022 from 5.5% in 2021. Global Economic Prospects report suggests after a strong rebound in 2021, the new COVID variant can threaten the global economy and might face a slowdown.
World Bank Group President David Malpass said, “The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with the government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly harmful to develop countries”. He further added that it will also require concerted international action along with some thorough national policy measures to put the global economy in its original state of growth path.
On Tuesday, according to the global economic report, the World Bank retained its forecast for India’s GDP growth for the current year at 8.3%. This was followed by the government’s estimate that India’s GDP will grow at 9.2% in the current financial year ending March 2022.
In addition to its economic growth forecasts for the United States, European nations, and China, the global agency warned that rising income inequality, high debt levels, and new Covid-19 variants could threaten recovery in developing economies.