A grave economic crisis confronts the world today. The passing show, so to speak, of Russia’s war in Ukraine, is likely to have a crippling effect on recession in both large and small economies. That grim foreboding can be contextualized with the World Bank president, David Malpass’s warning on Tuesday that the “grinding war’ could result in supply chain chokeholds, which coupled with the Covid-related lockdowns in China could lead to “dizzying rises” in energy and food prices. 

The contretemps is battering economies “all along the income ladder” and in consequence, there has been slower growth and surging inflation. “This suite of problems is hammering growth and for many countries, the recession will be hard to avoid”. The economic outlook, that has been advanced in the World Bank’s latest Global Economic Prospects report, is said to be grimmer than the one produced six months ago before war erupted in Ukraine; it is also below the 3.6 per cent that was forecast in April by the International Monetary Fund. 

Growth, which is expected to remain static in 2023, is likely to fall below the average achieved in the previous decade, the report stated. The World Bank has few bouquets to offer to the global economy on a wider canvas. Only a handful of oil-exporting countries, notably Saudi Arabia, are benefiting from prices of more than $ 100 a barrel. “Yet there is hardly a spot on the globe that has not seen its prospects dim”. In the advanced economies, pre-eminently that of the United States of America and Europe, growth has been predicted to slow to 2.5 per cent this year. China’s growth is projected to decline to 4.3 per cent from 8.1 per cent in 2021. At another remove, Russia’s economy is expected to contract by 8.9 per cent. The poorest nations will grow poorer as “the blows from the pandemic and the Ukraine war are still reverberating”. Global growth is expected to slow to 2.9 per cent this year from 5.7 per cent in 2021. In the broader perspective, the economic threats that a swathe of the world faces today mirror those faced in the 1970s when spiralling “oil shocks followed by rising interest rates had caused a paralyzing stagflation”. That combination of events triggered a series of financial crises that rocked develop- ing nations. On the net, the result was a “lost decade” of growth. 

The World Bank has iterated its familiar basket of remedies that include limiting government spend- ing, using interest rates to dampen inflation, and avoiding trade restrictions and subsidies. In the midst of the war that is seeming without end, the World Bank has suggested that public spending should give priority to protecting the most vulnerable. Not merely in Ukraine as penury knows no frontier.