World Bank Warns Geopolitical Tensions Pose One of Many Rising Threats to Global Economy
(24 October 2023 - United States) Simmering geopolitical threats in the Middle East, South China Sea, Ukraine and Amenia pose the gravest, but not only, danger to global economic growth the World Bank warns.
The deteriorating state of geopolitics and escalating war rhetoric, headlined by Israel and Gaza, will have an even more serious impact on economic development than previously anticipated.
The concerted rise in the benchmark for borrowing costs around the world is also fuelling rising concerns of a severe stagnation in economic growth. Private sector investment is desperately needed in developing markets however sovereign risks remain a key barrier.
"The US 10-year Treasury yield just surpassed five percent briefly, these are areas we haven't seen. That is right there lurking in the shadows" stated World Bank President, Ajay Banga at the annual Future Investment Initiative (FII) event in Riyadh.
"Risks tend to move around. So I would be very careful of fixating on one and ignoring the others right now. While everything in the developed world looks better than had been expected some time ago, I think that we're at a very dangerous juncture."
"One trillion of dollars is needed just for renewable energy in the emerging markets. There is not enough money in government coffers or even in the multilateral development banks, we need to involve the private sector with their capital. And that is the biggest task we have ahead of us."
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