World Bank Offers Dim Outlook for the Global Economy in Face of Higher Interest Rates

WASHINGTON (AP) The global economy is likely slowing sharply this year, hobbled by high interest rates, the repercussions of Russia's invasion of Ukraine and the lingering effects of the coronavirus pandemic.

That's the latest outlook of the World Bank, a 189-country anti-poverty agency, which estimates that the international economy will expand just 2.1% in 2023 after growing 3.1% in 2022. Still, the banks latest Global Economic Prospects report, which it issued Tuesday, marks an upgrade from its previous forecast in January. That estimate had envisioned worldwide growth of just 1.7% this year.

The Federal Reserve and other major central banks have been aggressively raising interest rates to combat a resurgence of inflation, set off by a stronger-than-expected rebound from the pandemic recession, persistent supply shortages and energy and food price shocks caused by the Ukraine war.