WB projects global economy will grow by modest 1.7% in 2023

The World Bank this week revised down the economic growth forecast for nearly 95 percent of advanced economies and 70 percent of emerging market and developing economies as the global economy is projected to grow by 1.7 percent in 2023 

According to the latest Global Economic Prospects report by the WB, over the next two years, per-capita income growth in emerging markets and developing economies is projected to average 2.8 percent. This is a full percentage point lower than the 2010-2019 average.

Excluding China, growth in emerging market and developing economies is expected to decelerate from 3.8% in 2022 to 2.7% in 2023, reflecting significantly weaker external demand compounded by high inflation, currency depreciation, tighter financing conditions, and other domestic headwinds, the WB said.

By the end of 2024, GDP levels in emerging and developing economies will be roughly 6 percent below levels expected before the pandemic.

For the South Asia region, growth is projected to slow to 5.5 percent in 2023, from 6.1 percent the previous year, on slowing external demand and tightening financial conditions, before picking up slightly to 5.8 percent in 2024.

Growth is revised lower over the forecast horizon and is below the region’s 2000-19 average growth of 6.5 percent.