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The World Bank is warning of a “steep slowdown” in economic growth in 2022, as the Omicron variant and inflation weigh on the recovery from Covid-19. In its latest economic forecast, the Bank expects slower global expansion this year and next, as well as a divergence between developed and developing countries. Franziska Ohnsorge, one of the report’s authors, told FRANCE 24 “it’s almost as if the two groups are on different flight paths”, as poorer countries lag behind richer ones.
To explain this trend, Ohnsorge points to steps taken by developing countries to withdraw pandemic-linked support to their economies “before the recovery is complete”.
Many central banks, she said, had to act in 2021 to combat rising inflation, while governments are following suit by reigning in stimulus spending.
“That’s going to continue in 80 percent of emerging market and developing economies for this year and next: we expect fiscal policy to be a big drag on growth,” Ohnsorge added.
The pandemic has also increased inequality within developing countries, according to the World Bank, widening the gap between rich and poor.
“The missed learning because of school closures was much higher among kids in households with lower-income parents, than in households with higher-income parents.”
As a result, Ohnsorge said, rising inequality “is likely to perpetuate itself, possibly even across generations”.
Also in the programme, as inflation hits its highest level in decades in the eurozone and the US, FRANCE 24’s Kate Moody looks at how the pace of price rises is calculated.
Finally, we report on how climate-conscious shoppers are choosing to pre-order new clothes, in an effort to reduce waste.
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