World Bank predicts economic shrink in 2022

World Bank predicts economic shrink in 2022
World Bank Country Manager, Mr. Firas Raad spokes to the reporters on Friday in Juba. [Alex Bullen, City Review]

The global economy is anticipated to fall by at least one percent this year, with more contraction expected next year, said the World Bank.

Mr. Firas Raad, World Bank Country Manager for South Sudan said that owing to the various shocks sapping GDP and raising prices, resulting in global sickness inflation, the global economy is likely to contract to a new level.

“We expect the economy to contract this year and further next year due to the drop in oil production, even though oil prices have gone up due to some factors,” said the World Bank Country Manager for South Sudan. “We are hoping it can recover, but as you know, there are shocks both domestically and globally,” he added.

He made the remarks during a press conference about the recent approval of $129 million to fund a government-led project in South Sudan to increase access to income-generating opportunities and strengthen the national safety net delivery system.

According to Mr Raad, the recent severe weather events that have happened across the country have resulted in multiple tragedies for human life, including displacements, supply chain disruptions, and other negative consequences.

European instability, notably Russia’s invasion of Ukraine, is a global concern that is affecting global price inflation.

“Food, energy, fertilizers, animal feed, and many other elements, in particular, have had an impact on the global economy,” he continued.

Staying hopeful

However, he assured that the bank was hopeful that things would stabilise locally and globally over time, and that everyone would benefit from an economic rebound.

The absence of conflicts, according to the World Bank Country Manager, is critical for the country’s economic revival.

“In order to achieve meaningful economic development, we need to see the country’s tensions subside.”

He added, “I believe that the compensating of wars and clement-related concerns, as well as other shocks like as the COVID-19 pandemic, which lasted more than two years, are all impediments that have negatively hampered economic progress.’’

“Yes, this year, the economy may contract by 1 to 2 percent and could contract further in the next physical year. This is the latest focus we have so far, and it is not unexpected given the conditions we see in the region,” he stressed.

In the latest report, the World Bank lowered its yearly global growth prediction to 2.9 percent from 4.1 percent in January, indicating that the slow growth will likely continue throughout the decade due to inadequate investment in most parts of the world.

It also noted that the effect from Russia’s invasion of Ukraine has exacerbated the global downturn by raising commodity prices and stoking inflation.

According to the Bank, global growth this year will be around half of last year’s annualized rate, with no improvement projected in 2023 and 2024.