Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment and disruptions caused by Russia’s invasion of Ukraine, the World Bank’s latest ‘Global Economic Prospects’ report shows.

Given fragile economic conditions, any new adverse development – such as higher-than- expected inflation, abrupt rises in interest rates to contain it, a resurgence of the Covid-19 pandemic, or escalating geopolitical tensions – could push the global economy into recession.

This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.

The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies.

Over the next two years, per capita income growth in emerging market and developing economies is projected to average 2.8%, which is a full percentage point lower than the 2010 to 2019 average.

In sub-Saharan Africa, which accounts for about 60% of the world’s extreme poor, growth in per capita income from 2023 to 2024 is expected to average just 1.2%, a rate that could cause poverty rates to rise, not fall.

“The crisis facing development is intensifying as the global growth outlook deteriorates. Emerging and developing countries are facing a multiyear period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates.

“Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” World Bank group president David Malpass said.

Growth in advanced economies is projected to slow from 2.5% in 2022 to 0.5% in 2023. Over the past two decades, slowdowns of this scale have foreshadowed a global recession.

In the US, growth is forecast to fall to 0.5% in 2023, which is 1.9 percentage points below previous forecasts and the weakest performance outside of official recessions since 1970.

In 2023, euro-area growth is expected to be 0%, which is a downward revision of 1.9 percentage points. In China, growth is projected at 4.3% in 2023, which is 0.9 percentage points below previous forecasts.

Excluding China, growth in emerging market and developing economies is expected to decelerate from 3.8% in 2022 to 2.7% in 2023, reflecting significantly weaker external demand, compounded by high inflation, currency depreciation, tighter financing conditions and other domestic headwinds.

By the end of 2024, gross domestic product (GDP) levels in emerging and developing economies will be about 6% below levels expected before the pandemic. Although global inflation is expected to moderate, it will remain above prepandemic levels.