The World Bank has reduced its global growth forecast for 2022 by 3.2%, almost a full percentage point down from its previous forecast of 4.2%.
The revised figure was in light of the economic fallout from Russia’s invasion of Ukraine, World Bank President David Malpass told reporters.
The International Monetary Fund is also expected to cut its global growth forecast on Tuesday.
Speaking on a conference call, Malpass said that the World Bank was proposing a 15-month crisis financing target of $170 billion, and aims to provide about $50 billion of this financing over the next three months.
“We’re preparing for a continued crisis response, given the multiple crises,” Malpass said. “Over the next few weeks, I expect to discuss with our board, a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023”.
The effects of Russia’s military action against its neighbor are being felt around the world, with resulting spikes in food and energy prices playing a role in the growth forecast reduction. Malpass added that a 4.1% contraction in the Europe and Central Asia region was the largest single factor driving the newly-calculated forecast lower.
The package proposed in response to the Ukraine crisis is even larger than the $160 billion committed to the Covid-19 financing program, of which Malpass said $157 billion was committed through June 2021.
The financing will partly be used to support countries that have taken in refugees from Ukraine, and will also help address food shortages in countries heavily dependent on presently-disrupted supply lines.