Washington: Russia’s invasion of Ukraine could trigger a global recession due to its impact on food, energy and fertilizer prices, World Bank president David Malpass has said.
He was of the opinion that developing nations are likely to be among the worst affected.
“As we look at global GDP it’s hard right now to see how we avoid a recession. The idea of energy prices doubling is enough to trigger a recession by itself,” he was quoted as saying by Reuters.
Malpass, however, did not say when recession may set in.
Malpass said that Ukraine and Russia are likely to see significant contractions, while Europe and the United States are experiencing slower growth. As for China, he felt the sharp slowdown was caused by COVID-19 pandemic, inflation and a real estate crisis.
The World Bank chief is not the only one to issue a warning about increased global risks in the backdrop of three-month war in Ukraine and the COVID pandemic which is into its third year.
The Institute of International Finance (IIF) recently slashed 2022 growth outlook for global output from 4.6 per cent to 2.3 per cent. It pegged growth in US, Japan and European region at 1.9 per cent and China from 5.1 per cent to 3.5 per cent.
“Global recession risk is elevated,” the IIF said.
The possibility of a worldwide recession has also been flagged at the ongoing World Economic Forum in Davos, as inflation is at its highest level in over a decade in the United States, Britain and Europe.
World Bank last month reduced 2022 global growth forecasts from 4.1 per cent to 3.2 per cent because of the impact of Russia’s Ukraine invasion.
As for India, World Bank brought down growth estimates from 8.7 per cent to 8 per cent.
