The international financial institution is now forecasting 2 percent growth for 2023 – up from a 1.7 percent forecast in January.

In his opening address at the 2023 World Bank/IMF spring meetings on Monday, David Malpass, president of World Bank, said despite the upward revision, the the pace of global growth would slow this year compared with 3.1 percent in 2022.

“Global growth is expected to be weak this year, slowing to 2% from 3.1% in 2022. For the U.S., we’re expecting a slowdown to 1.2% from 2.1% in 2022,” Malpass said.

“Several factors are weighing on the second half outlook: Oil prices have jumped back above $80/barrel. The recent banking sector stress dampens activity. And inflation pressures persist.

“The U.S. month-over-month core inflation has been rising over the last five months. There will be new data on Wednesday.”

The World Bank also predicted that the economic slowdown in developing countries would persist for years.

The bank said the slowdown would further increase debt distress for developing countries.

“If we look at developing countries excluding China, we expect a slowdown to about 3.1% in 2023 from 4.1% in 2022,” Malpass said.

“The concern in our recent reports is that slow growth will persist for years for many developing countries, increasing the fiscal stress and debt problems. It’s a combination of weak investment, higher interest rates, and relatively weak growth in the advanced economies.

“The danger is acute due to inflation, currency depreciation, rising debt service costs, and the collapse of international reserves.

“The diversion of natural gas to Europe presents grave obstacles to developing country production of electricity, fertilizer, and food.

“These problems are severely constraining future growth and deepening inequality and fragility for developing countries.

“I travelled to West Africa in March, where we are working to provide support in the face of these problems.”

Malpass said he had advocated a range of new policies that would spur production to combat inflation and currency weakness.

“But the likelihood is a long period of slow growth, asset reprising, and capital moving in the wrong direction — toward a narrow group of governments and big corporations rather than to the small businesses and working capital that could add to global growth,” he said.

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At the ongoing April 2020 virtual Spring meetings of the World Bank and International Monetary Fund (IMF), David Malpass, the World Bank president, said beginning from May I, there would be debt relief.

“IDA countries will have bilateral debt relief beginning May 1. That way, they can concentrate their resources on fighting the pandemic and its economic and social consequences,” he said.

“I take note that in the G-20 meetings, China is supporting the international agreement to allowing moratorium of debt repayments by IDA countries if they ask for forbearance.

“That’s very important because China is one of the biggest creditors and their participation in that effort is important and was very welcome.”

Countries under the International Development Association (IDA) are those with per capita income below an established threshold. The 2020 threshold is $1,175.

Countries, such as Nigeria and Pakistan, are IDA-eligible based on per capita income levels and are also creditworthy for some IBRD borrowing. They are referred to as ‘blend’ countries.

A moratorium is the suspension of debt repayments while debt relief is the reorganization of debt in any shape or form so as to provide the indebted party with a measure of respite, either fully or partially.

Malpass said a system will be set up to monitor how developing countries utilise the funds made available by the debt relief.

“So if the government saves money by not paying creditors, there is an expectation that they use it for health, education, economic rebuilding, jobs and concrete ways to help the people of their country,” he said.

“There is also within the debt relief initiative, the idea that there will be monitoring and assessment of the debt sustainability of poor countries.

“That process itself will amount to transparency. That’s going to change the way that countries have been lending into the developing world and it will improve it substantially and there will be a big benefit even to the creditors.

“It’s not the best system for creditors to be making non-transparent loans into poor countries and this is going to improve the system.”

He also said the process will also ensure that developing countries get more grants and concessional loans.

The details of the debt relief agreement have not yet been made public.

On Wednesday, TheCable had launched a campaign asking China to grant debt relief to Nigeria.

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In February, Donald Trump, the US president, had announced Malpass as his candidate.

In a statement released on Friday, the bank’s executive board of 25 members said it unanimously selected Malpass for a five-year term, which is scheduled to begin on April 9 ahead of the spring meetings organised alongside the International Monetary Fund (IMF).

He was a senior economic adviser to the US president during his 2016 election campaign and currently serves as the undersecretary for international affairs at the Treasury Department of the United States.

On previous occasions, the economist had criticised the World Bank and other multilateral institutions of being intrusive.

He had also pushed for the World Bank to reduce lending to China, arguing that the Asian country has enough resources to support itself.

And last year, he was part of negotiations over a package of World Bank lending reforms.

Malpass had hinted that the Bretton Wood institution would focus more resources on poorer countries.

Jim Yong Kim, outgoing president of the World Bank, will join Global Infrastructure Partners (GIP), a New York-based private investment fund owned by Bayo Ogunlesi, as a partner and vice chairman.

Ngozi Okonjo-Iweala, Nigeria’s former coordinating minister for the economy, had said she was willing to lead the World Bank if she was nominated by a member of the board.

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Malpass is a Trump loyalist, who served as senior economic adviser to the president during his campaign in 2016, and currently the undersecretary for international affairs at the Treasury Department of the United States.

“I am certain there could be no better candidate to lead the World Bank than David. He’s going to do very well,” Trump said from the White House on Wednesday night.

Responding to his nomination, Malpass said he is very optimistic the bank can achieve breakthroughs in combating extreme poverty.

“I’m very optimistic that we can achieve breakthroughs to create growth abroad that will help us combat extreme poverty and increase economic opportunities in the developing world,” Malpass said.

Malpass had criticized both the World Bank and the International Monetary Fund, calling for improvements in the bank’s lending programs.

He said a process must be in put in place “to focus, prune and streamline” such multilateral institutions.

The US nominee has always gone on to be the president of the World Bank — since it was founded over 70 years ago.

For the first time in 2012, the nomination for the World Bank presidency was widened outside the US as governors from developing countries nominated Ngozi Okonjo-Iweala, former minister of finance.

Okonjo-Iweala is expected to contest the post for a second time — if nominated.

At the World Economic Forum in Davos, 2019, Okonjo-Iweala was asked if she would recontest, she said: “I know that, because I contested the last time in 2012, and many people were asking that question. It is a shareholder’s decision and they have to decide how they want it. Someone has to nominate”.

“If the right person were to nominate, and if the circumstances are right and people feel I can do the job, yes.”

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