We support our Publishers and Content Creators. You can view this story on their website by CLICKING HERE.

The World Bank yesterday raised the risk of a global recession, warning economies may face a 1970s-like period of stagflation, characterized by slow economic growth and rising prices. The organization lowered its global growth forecast for this year to 2.9%, down from 5.7% in 2021. Growth is expected to hover around that figure through 2024, the bank said, citing disrupted human activity, trade, and investments due to pandemic lockdowns and Russia’s invasion of Ukraine. Read the report here.

Today’s environment of high inflation, weak growth, and supply-chain disturbances draws parallels with the 1970s, when stagflation (see 101) required increases in interest rates in major economies, which then triggered financial crises in emerging markets and developing economies. Still, there are differences now, including a stronger US dollar and stronger balance sheets at major financial institutions.

The World Bank advised policymakers to avoid export bans and subsidies, instead focusing on accelerated debt relief and cushioning a spike in oil and food prices.