WASHINGTON — The World Bank lowered its annual growth forecast for 2022 on Monday by almost a full percentage point from 4.1% to 3.2%, citing Russia’s response to Ukraine’s economic problems.
World Bank President David Malpass told reporters at a news conference that the biggest factor in reducing growth is forecast to be a 4.1% economic slowdown in Europe and Central Asia, according to Reuters.
Other factors contributing to the slowdown in growth in January forecasts include higher food and fuel prices in consumer economies around the world, Malpass said.
This is another consequence of Western sanctions on Russia’s power, which has raised the price of oil and gas worldwide. The disruption of agricultural exports to Ukraine is also said to be causing prices to rise.
Russia has closed the Ukrainian ports of the Black Sea, making it extremely dangerous for shipping ships carrying grain and other goods to travel on the main sea route linking Ukraine to other countries.
The World Bank is “preparing for the crisis, and for delivering more solutions,” Malpass told reporters. “In the next few weeks, I look forward to discussing with our board a new 15-month envelope to address the $ 170 billion final issue for April 2022 through June 2023.”
This Ukrainian crisis financial package is even bigger than the World Bank planned to help Covid-19, which rose to one hundred and sixty dollars.
However, the damage done by Russia to Ukraine to the global economy is disappearing compared to the catastrophe it caused to the Ukrainian economy, and to some extent Russia.
Earlier this month, the World Bank estimated that Ukraine’s annual GDP would fall by 45.1%, a surprising national population of more than 40 million.
Before the war, analysts predicted that Ukraine’s GDP would rise sharply in the coming years.
Russia’s economy is also experiencing a major blow, largely due to the collapse of NATO and Western-backed sanctions and trade embargoes.
In early April, the World Bank predicted that Moscow’s GDP would fall 11.2% this year due to sanctions.
Russian President Vladimir Putin on Monday insisted that Western powers had failed in what he called Russia’s economic attack.
After a sharp fall in the first weeks of the war, the Russian ruble regained much of its value. But economists say the reversal is a lie created by the Kremlin’s strong domestic currency regime, which has added false value to the ruble within Russia.