Policy makers around the world are rolling back monetary and fiscal support at a degree of synchronization not seen in half a century, according to the study released in Washington on Thursday. That sets off larger-than-envisioned impacts in sapping financial conditions and deepening the global growth slowdown, it said.
The World Bank study estimates 2023 global gross domestic product growth to slow to 0.5 per cent, and contract 0.4 per cent in per capita terms that would meet the technical definition of a global recession. After record expansion in 2021, this would cut short recovery well before economic activity has returned to its pre-pandemic trend, it said.
The study by World Bank economists Justin-Damien Guenette, M. Ayhan Kose, and Naotaka Sugawara sees a way for central banks to continue their efforts to control inflation without triggering a global recession, and prescribed an action plan for policy makers: Advanced-economy central banks should keep in mind the cross-border spillover effects of tightening, while authorities in emerging markets should strengthen macro-prudential regulations and build foreign-exchange reserves
Could your guest comment on the 2s/10s inversion?