The World Bank has identified looming interest rates, rising inflation, and the impact of COVID-19-related economic shutdowns as contributors to shrinking privately-run businesses.
The global bank listed Nigeria and other developing economies as those adversely hit by the harsh economic weather.
According to them, the private sector is shrinking under intense pressure.
World Bank Group President, David Malpass, in an opening remark at the launch of the 2022 Global Economic Prospects (GEP) report, said elevated inflation is hard to stop, and supply chains may continue to be disrupted.
He said a third of developing countries have already had a hike in interest rates, while the private sectors in such countries are dying.
Malpass said COVID-19 and the shutdowns still take a huge toll, especially on people in poor countries, saying these developments have led the bank to lower the global growth forecast for this year.
He said: “In the new GEP the World Bank is lowering our global growth forecast to 4.1 percent for 2022. That’s down two-tenths of a percent from the June GEP when growth was put 5.6 percent in 2021.
“The forecast assumes COVID-19 has its biggest impact on the first quarter. If the variants persist, there’s a downside risk to the forecast that could reduce global growth further anywhere from 2/10 to 7/10 of a percentage point.
“Developing countries are facing severe long-term problems related to lower vaccination rates, global macro policies, and the debt burden.”
