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World Bank Sees Slow Growth in 2023

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Markets closed today at session highs across the board, as the indices managed to reverse the modest selling off ahead of today’s pre-market. The Dow gained +187 points, +0.56% overall, while the S&P 500 was +0.70%. The Nasdaq performed admirably, +1.01% or +106 points, but it was the small-cap Russell 2000 that was the strongest of the four, +1.49%.

The World Bank today issued an update on its Global Growth Projection for 2023 — slashing it to +1.7% from +3% it posted just six short months ago. World Bank President David Malpass cited the usual suspects for a sluggish global economy going forward — higher inflation and interest rates — for what he sees as a “sharp, long-lasting slowdown,” with added concern for emerging-market countries.

“Emerging and developing countries” are expected to experience a “multi-year period of slow growth,” based on “heavy burdens and weak investment,” according to Malpass. Emerging countries are expected to grow +2.8% — a full percentage point lower than the yearly average between 2010-2019. Advanced economies, including the U.S., are now projected to grow +0.5% this year, compared with +2.5% in 2022.

The World Bank put more of its weight behind concerns in the developing world than the already-developed countries like the U.S. A global recession might have serious detrimental effects in the poorer regions of the world, like sub-Saharan Africa, which may find more people falling into poverty as a result. This is an institution whose primary function has always been about developing countries that need assistance, so Malpass’ focus is understandable.

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