WASHINGTON: World Bank Group President David Malpass said on Monday (Apr 10) that the lender has revised its 2023 global growth outlook slightly upward to 2 per cent from a January forecast of 1.7 per cent but the slowdown from stronger 2022 growth will increase debt distress for developing countries.
Malpass told a media briefing that the upward revision was due to an improved outlook for China’s recovery from COVID-19 lockdowns, with growth now pegged at 5.1 per cent this year compared to 4.3 per cent in the bank’s January Global Economic Prospects report.
Advanced economies, including the US and in Europe, are also doing a bit better than the World Bank anticipated in January, Malpass said as the World Bank’s and International Monetary Fund’s Spring Meetings week kicked off.
But the departing World Bank chief warned that turmoil in the banking sector and higher oil prices could again put downward pressure on growth prospects in the second half of 2023. A bank asset maturity mismatch will take some time to work through and banks are likely to pull back credit for businesses, slowing growth, he said.
Malpass said that technical meetings this week with Chinese officials can help “break the ice” on potential movement on badly needed debt relief for poor countries.
Malpass said China also would be able to score some political points at a fairly low cost for its lending institutions.
“From the standpoint of their institutions, it’s not such a big amount,” Malpass said. “It beneficial to China to be making this movement” from both economic and political standpoints.
Source: Reuters
