World Bank downgrades 2023 global growth forecast

The World Bank has slashed its global economic growth forecasts for this year, saying the world could even face recession.

In its latest report on Tuesday, the bank said it expects global GDP growth of 1.7 percent in 2023. That's 1.3 percentage points lower than its previous forecast issued last June.

By country and region, the bank predicts the US economy to grow 0.5 percent, 1.9 points lower than the June forecast. It forecasts zero growth for the euro area, down 1.9 points from its previous projection. It said record-level inflation and interest rate hikes would rapidly slow economic growth.

The growth forecast for China was lowered 0.9 points to 4.3 percent due to the severity of coronavirus-related disruptions. Growth for Japan is projected to be 1 percent, 0.3 points lower than the June forecast.

The bank notes world economic conditions are fragile. It says any new adverse development, such as higher-than-expected inflation or abrupt rises in interest rates, could push the global economy into recession.

The report also warns the outlook for emerging market and developing economies -- which are struggling with heavy debt burdens -- will be especially bleak. It says rising interest rates in developed economies are depriving poorer countries of investment capital.