New Delhi. The World Bank has issued a big warning regarding the economic slowdown. According to the World Bank, the world may face an economic recession in the year 2023. The main reason for this is limited economic policies by central banks around the world. The World Bank has advised to increase productivity and remove supply constraints to control inflation. According to the report released by the World Bank, the global economy is now going through its toughest phase after recovering from the recession of 1970. To keep inflation under control, the central bank will keep the global interest rate at 4 percent, which will be double compared to 2021. The interest rate of food and oil can become volatile and go up to 5 percent. Loan rates are increasing rapidly in all European countries including India America. This policy is being adopted with the aim of stopping the supply of cheap money and controlling inflation, but many disadvantages of such economic policies are also being seen. This has a profound impact on investments, jobs and growth. World Bank Group President David Malpass, in a statement after the report came out on Thursday, said that “global growth is slowing down very rapidly and is expected to remain low going forward.”
In such a situation, it will have a very bad effect on the world markets and the developing economy. The main reasons for this are the reduction in food supply due to the Ukraine war, the lack of demand due to the lockdown and the predicted impact on agriculture due to bad weather. At the same time, the Reserve Bank of India has increased the repo rate for the third time in August, with an increase of 50 basis points to 5.40 percent. The inflation rate for 2022-23 is being projected by RBI at 6.7 percent, GDP growth rate at 7.2 percent. India’s retail inflation also reached 7 per cent in August due to increase in food prices, from 6.71 per cent in the month of July.
On the other hand, the consumer inflation rate has remained above the 4 per cent limit set by the central bank for the eighth consecutive month. According to the latest World Bank report, inflation cannot be controlled merely by raising interest rates. All countries have to focus on increasing production and increasing the availability of goods.