Fragile economic conditions around the world means any new adverse development could put the global economy into a recession, the World Bank reported this week. The World Bank added that it would be the first time in more than 80 years that two global recessions have occurred within the same decade.

Potential problems that could push the globe into a recession include higher-than-expected inflation, a resurgence of Covid-19 or escalating geopolitical tensions.

The global economy is expected to grow by 1.7% this year. A previous estimate by the World Bank had put expected growth at 3%.

World Bank economists are warning that the downturn would be widespread and any adverse developments risk pushing the global economy into recession. Slowing growth affects 95% of advanced economies and nearly 70% of emerging markets and developing economies, with the potential for increasing poverty rates in some regions.

In the case of advanced economies, the report expects ‘a very deep downturn’, slowing from 2.5% last year to 0.5% this year.

In the US, World Bank expects growth to be around 0.5%. In the Euro area, growth will be flat.

Emerging market developing economies (excluding China) will see growth slow from 3.5% last year to 2.7% this year. In the case of China, the World Bank said it hopes that growth will be around 4%, but it is still 1% points almost lower than what it expected six months ago.

“Emerging and developing countries are facing a multiyear period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates,” said David Malpass, president of World Bank Group. “Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change.”