Poor Nations Economy to Weaken Compared to 2000s’ – World Bank

According to the World Bank, compared to the 2000–2010 era, the economic development of developing countries will slow by over a third in the ensuing seven years.

The lender attributed the slow growth in a development outlook presented last week to recent events, including the lingering economic repercussions of COVID-19 and the worldwide spillover effects of Russia’s war in Ukraine.

“These effects are being felt more acutely in the developing world, hurting sectoral performance hence growth for the remainder of this decade is projected to be one-third lower than it was in the 2000s,” World Bank says.

It says that further effects of these crises will throw tens of millions of people back into poverty, averting the 2030 Sustainable Development Goals of ending extreme poverty.

“The current rate of progress implies that nearly 600 million people will still be living on less than $2.15 (Sh291) a day in the coming seven years.”

The lender claims that the long-term outlook is as dismal as shocks from COVID-19, the Russia-Ukraine war, and the current financial constraints might harm crucial industries and halt growth.

For instance, the education shocks associated with COVID could cost current students in low- and middle-income nations up to 10% of their future wages.

The forecast takes into account the IMF’s most recent growth projections for Sub-Saharan African nations, the majority of which fall into the developing category.

It predicted that the region’s growth would slow this year to 3.6%, marking the second year in a row that the region registers growth at a slower rate than the year before when it increased by 4.7%.

However, this is only until 2024, when it will increase to 4.2 percent due to the predicted global recovery, declining inflation, and a slowing of monetary policy tightening.

Since activities are predicted to slow down for a second consecutive year, the IMF ascribed the slower prediction to the general global slowdown.

In comparison to the previous two years’ estimates of 5.4 percent in 2022 and 7.5 percent in 2021, Kenya’s growth expectations decreased to a pace of 5.3 percent.