Global Economy Is at Risk of Recession, World Bank Warns
TimeNov 02, 2022
The Facts
The World Bank warned on Tuesday that the global economy will come "perilously close" to a recession in 2023, led by weaker growth in all the world's top economies — the United States, Europe, and China.
The World Bank predicts that growth for 2023 will be 1.7%, down from its previous projection of 3%. If accurate, this would make it the third-weakest annual expansion in three decades — trailing only the recessions that resulted from the 2008 financial crisis and the start of the COVID pandemic in 2020.
The Spin
Pro-establishment narrative
Economic activity is decreasing sharply because of tight monetary policies intended to contain high inflation and other factors, such as less favorable financial conditions and disruptions caused by Russia's invasion of Ukraine. The outlook has some downside risks. These include higher inflation, even tighter monetary policy, financial stress, and rising geopolitical tensions. To mitigate these risks, policymakers will be focusing on reforms that support growth and bolster the resilience of vulnerable groups.
Establishment-critical narrative
Is a declining economy the end of the world? A 2 or 3% annual increase in the global economy is a substantial amount of growth over time. At 2% growth annually, the economy would grow more than seven times in a century — putting the emissions goals necessary to curb climate change out of reach. Emissions must decline steeply and fast. Perhaps we should consider "degrowth" by advocating for a universal basic income, shorter work weeks, and easing consumption.