The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term, the World Bank added.
In addition, a notable deceleration in major economies—including the United States and China—will weigh on external demand in emerging and developing economies.
The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly harmful for developing countries,” said World Bank Group President David Malpass.
“Putting more countries on a favorable growth path requires concerted international action and a comprehensive set of national policy responses.” he added.
Growth in advanced economies is expected to decline from 5 percent in 2021 to 3.8 percent in 2022 and 2.3 percent in 2023—a pace that, while moderating, will be…