The World Bank issued warning that many countries are going to enter recession, as it cut its global growth projection for the year to 2.9%, from the previous prediction of 4.1%.

The Press release, issued Tuesday, said, “Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022.”

It went on to say, “Several years of above-average inflation and below-average growth are now likely, with potentially destabilizing consequences for low- and middle-income economies. It’s a phenomenon – stagflation – that the world has not seen since the 1970s.”

WB President David Malpass noted, “for many countries, recession will be hard to avoid.”

The statement went onto not that growth would likely continue to be stuck at 3% for 2023 and 2024, as policy support was pulled back, pent-up demand from the pandemic dissipated, and the Russian military action in Ukraine continued to disrupt oil markets, trade, and investments.

It went on to predict the slowdown in growth from 2021 to 2024 would be twice that of the period lasting from 1976 to 1979. It noted how the recover from the stagflation of the 70’s required massive increases in interest rates, and those rate hikes, “played a prominent role in triggering a string of financial crises in emerging market and developing economies.”

The report predicted that although rich and poor countries would be hit by the reduction in growth, it would be developing and emerging markets which bore the brunt of the effects. Growth in advanced economies this year would decline from 5.1% to 2.6% this year, while developing countries are expected to see a decline from 6.6% to 3.4%.

The report concluded, “Just over two years after Covid-19 caused the deepest global recession since World War II, the world economy is again in danger … Even if a global recession is averted, the pain of stagflation could persist for several years – unless major supply increases are set in motion.”