By the Numbers: World Bank updates economic outlook and reckons the 1970s
Toronto – June 8, 2022 – The World Bank, which acts as a global development institution tasked with alleviating poverty the world over, has hastened its economic outlook with key indicators reminiscent of the 1970s.
In its latest report, Global Economic Prospects, the Bank raises the specter of the 1970s when sounding the alarm on stagflation – a toxic mix of high inflation and low growth across much of the world’s advanced economies.
With the post-pandemic growth rate between 5 and 8 percent in advanced economies, updated forecasts predict GDP growth between just 2 and 5 percent over the next two years, as high inflation stirs the prospect of stagflation.
As central banks in advanced economies constrict the flow of capital through increased interest rates to fight high prices domestically, the backdrop of a low growth environment could trigger a recession, which would play out poorly for labour and capital investments.
To make matters worse, bosses and politicians use deteriorating economic conditions to restrict supports for workers and families, which is a careful calculation people need to consider for future elections and the collective bargaining battles that lie ahead.