The World Bank lowered its annual global growth forecast for 2022 on Monday by nearly a full percentage point, down from 4.1% to 3.2%, citing the impact that the situation in Ukraine is having on the world economy.
World Bank President David Malpass told reporters on a conference call that the largest single factor in the reduced growth forecast was a projected economic contraction of 4.1% across Europe and Central Asia, according to Reuters.
Other factors behind the slowdown in growth from January’s forecast include higher food and fuel costs being borne by consumers in developed economies across the world, said Malpass.
These are partly the result of Western sanctions on Russian energy, which have driven up the price of oil and gas worldwide. Supply disruptions to Ukrainian agricultural exports are also cited as contributing factors to pushing prices higher.
The World Bank is “preparing for a continued crisis response, given the multiple crises,” Malpass told reporters. “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.”
This Ukraine crisis financing package is even larger than the one the World Bank organized for Covid-19 relief, which topped out at $160 billion.
