World Economic Situation and Prospects (WESP) mid-year update

A sudden escalation of trade tensions has sent shockwaves through the global economy, dampening growth prospects while fueling uncertainty and inducing financial market volatility.

Near-term global economic outlook cautiously optimistic as vulnerabilities remain

The world economy is in the doldrums, with weak economic growth, stubborn inflation and rising interest rates in the major developed economies clouding the near-term economic outlook. Legacy effects of the COVID-19 pandemic, the protracted war in Ukraine, exacerbating effects of climate change are impeding a rebound of global growth.

Global growth prospects have weakened significantly amid the war in Ukraine, rising energy, food and commodity prices, soaring inflation and tightening monetary policy stances by major central banks.

While the global growth outlook has improved, led by robust rebound in China and the United States, surging COVID-19 infections and inadequate vaccination progress in many countries threaten a broad-based recovery of the world economy.

GDP growth in developed countries will plunge to ?5.0 per cent in 2020, while output of developing countries will shrink by 0.7 per cent. The projected cumulative output losses during 2020 and 2021?nearly $8.5 trillion?will wipe out nearly all output gains of the previous four years. The pandemic has unleashed a health and economic crisis unprecedented in scope and magnitude.

Global growth outlook has weakened, amid unresolved trade tensions and elevated international policy uncertainty, according to the World Economic Situation and Prospects as of mid-2019. Across both developed and developing countries, growth projections for 2019 have been downgraded.?

Short-term prospects for the world economy have continued to improve, according to the World Economic Situation and Prospects as of mid-2018. World gross product is expected to expand by 3.2 per cent in both 2018 and 2019, marking an upward revision from forecasts released in December 2017.

The mid-year update of the World Economic Situation and Prospects 2017 confirms the projections made in January 2017 of a modest recovery in global growth for 2017-2018. Helped by a moderate recovery in trade and investment, world gross product is expected to expand by 2.7% in 2017 and 2.9% in 2018. While this marks a notable acceleration compared to 2016, growth in many regions remains below the levels needed for rapid progress towards achieving the Sustainable Development Goals.