September 29, 2022
World Bank warns global economy may suffer 1970s-style stagflation

The global economy may be headed for years of weak growth and rising prices, a toxic combination that will test the stability of dozens of countries still struggling to rebound from the pandemic, the World Bank warned Tuesday.

Not since the 1970s – when twin oil shocks sapped growth and lifted prices, giving rise to the malady known as “stagflation” – has the global economy faced such a challenge.

The bank slashed its annual global growth forecast to 2.9% from January’s 4.1% and said that “subdued growth will likely persist throughout the decade because of weak investment in most of the world.”

And the situation could get even worse if the Ukraine war fractures global trade and financial networks or soaring food prices spark social unrest in importing countries.

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