World Bank
World Bank dims outlook for global economy amid Russia war
The World Bank has sharply downgraded its outlook for the global economy, pointing to Russia’s war against Ukraine, the prospect of widespread food shortages and concerns about the potential return of “stagflation” — a toxic mix of high inflation and sluggish growth unseen for more than four decades.
The 189-country anti-poverty agency predicted Tuesday that the world economy will expand 2.9% this year. That would be down from 5.7% global growth in 2021 and from the 4.1% it had forecast for 2022 back in January.
“For many countries, recession will be hard to avoid,” said David Malpass, the World Bank’s president.
The agency doesn’t foresee a much brighter picture in 2023 and 2024: It predicts just 3% global growth for both years.
Read: Overseas aid cuts imperil SDGs: UN chief
For the United States alone, the World Bank has slashed its growth forecast to 2.5% this year from 5.7% in 2021 and from the 3.7% it had forecast in January. For the 19 European countries that share the euro currency, it downgraded the growth outlook to 2.5% this year from 5.4% last year and from the 4.2% it had expected in January.
In China, the world’s second-biggest economy after the United States, the World Bank expects growth to slow to 4.3% from 8.1% last year. China’s zero-COVID policies, involving draconian lockdowns in Shanghai and other cities, brought economic life to a standstill. The Chinese government is providing aid to ease the economic pain.
Emerging market and developing economies are collectively forecast to grow 3.4% this year, decelerating from a 6.6% pace in 2021.
Russia’s invasion of Ukraine has severely disrupted global trade in energy and wheat, battering a global economy that had been recovering robustly from the coronavirus pandemic. Already-high commodity prices have gone even higher as a result, threatening the availability of affordable food in poor countries.
Read: High prices, Asian markets could blunt EU ban on Russian oil
“There’s a severe risk of malnutrition and of deepening hunger and even of famine,” Malpass warned.
The World Bank expects oil prices to surge 42% this year and for non-energy commodity prices to climb nearly 18%. But it foresees oil and other commodity prices both dropping 8% in 2023. It likened the current spike in energy and food prices to the oil shocks of the 1970s.
“Additional adverse shocks,” the agency warned in its new Global Economic Prospects report, “will increase the possibility that the global economy will experience a period of stagflation reminiscent of the 1970s.’’
The prospect of stagflation poses a dilemma for the Federal Reserve and other central banks: If they continue to raise interest rates to combat inflation, they risk causing a recession. But if they try to stimulate their economies, they risk driving prices higher and making inflation an even more intractable problem.
The World Bank noted that the previous period of stagflation required rate increases so steep that they tipped the world into recession and led to a series of financial crises in the poor countries of the developing world.
WB to provide Tk 255 cr as food aid to Rohingyas: State Minister
The World Bank will provide a grant of Tk 255 crore for food aid to the forcibly displaced Rohingya community from Myanmar staying at Teknaf and Ukhia in Cox's Bazar, said State Minister for Disaster Management and Relief Md Enamur Rahman on Sunday.
The state minister told reporters after the signing ceremony of an agreement between the Ministry of Disaster Management and Relief and the World Food Program (WFP) at the ministry.
Also read: Rohingya repatriation should be UNHCR's priority: Momen
Secretary of the Ministry of Disaster Management and Relief Md Kamrul Hasan on behalf of the ministry and Country Director Jane Pearce on behalf of the WFP signed the agreement in presence of other senior officials from the ministry and the WFP.
Under the agreement, WFP will provide food aid to Rohingyas in Cox's Bazar through the Safety Net System for the Poorest project, funded by the World Bank, said the state minister.
Also read: Take care of Rohingyas like Bangladesh: UNHCR to regional countries
The project will provide nutrition education to women, assistance to children under the five in health centers, materials and training in vegetable gardening, plantation and preservation of trees, and mountain slopes, cleaning roads and sewers and carrying out various awareness activities to prevent anti-social activities in the Rohingya camps, he added.
World Bank to disburse 700 million USD to Sri Lanka: minister
The World Bank will disburse approximately 700 million U.S. dollars to Sri Lanka within the next few months, Sri Lanka's foreign minister announced on Monday.
This pledge was made when the World Bank's Country Manager in Colombo Chiyo Kanda talked to Sri Lankan Minister of Foreign Affairs G.L. Peiris.
During the meeting, the minister sought assistance from the World Bank until long term assistance materializes through the International Monetary Fund, other international institutions and donor countries.
The minister stated that short term financial assistance from the World Bank would be appreciated until sustainable solutions are found.
Also Read: Sri Lanka’s prime minister tackles thorny finances, economy
The World Bank country manager said that her office is also working with other organizations such as the Asian Development Bank, Asian Infrastructure Investment Bank, and the UN office, encouraging them to "re-purpose" their already committed projects to help the people of Sri Lanka at this difficult time.
Sri Lanka is facing a severe foreign currency shortage which has created problems in importing essential items.
World Bank loan to bolster Bangladesh's economic growth
Bangladesh and the World Bank have signed a $250 million financing agreement to support the country’s reform efforts to sustain growth following the pandemic and to enhance resilience to future shocks, including climate change.
The Bangladesh First Recovery and Resilience Development Policy Credit — the first in a series of two credits — will help Bangladesh build a stronger fiscal and financial sector to sustain growth, the World Bank said in a release.
The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing, has a 30-year term, including a five-year grace period.
It will help streamline the bank recovery framework with all scheduled banks to update recovery plans annually.
Read: Deal signed with World Bank for $250 million towards post-pandemic recovery
The programme supports the legislative framework on payments, which will contribute to a more efficient financial system.
The programme supports adjustments to the interest rates of public savings instruments such as the National Savings Certificate.
Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan, said that Bangladesh has made a robust economic recovery from the pandemic.
“This programme will further support the government’s policies to make the economy more resilient and competitive as Bangladesh strives to become an upper-middle income country by 2031.”
The cancellation of 8,451 MW of investments in coal-fired electricity generation projects will accelerate the country’s transition to decarbonisation and a green economy.
The revised National Building Code will help the country reduce greenhouse gas emissions by improving energy efficiency in buildings.
Read: World Bank projects Ukraine's economy to shrink by 45 pct this year
The programme will support the National Tariff Policy to modernise taxes and foster a globally competitive export industry. It will help to better leverage digital technologies and enable non-resident firms to submit VAT returns, according to the World Bank.
The increased coverage of the electronic government (e-GP) system will improve efficiency of public procurement.
It will also support the coverage, speed, and efficiency of social protection programmes to help the government rapidly respond to extreme climate events such as floods and cyclones.
By using the government-to-person payment platform for cash transfers, the government can identify new and existing beneficiaries for emergency assistance while also capturing gender-disaggregated payment data.
Deal signed with World Bank for $250 million towards post-pandemic recovery
Dhaka, April 18 (UNB)-The World Bank provides USD $ 250 million for the recovery and resilience of the economy from the adverse impact of Covid-19 pandemic.
A loan agreement of $250 million signed on Monday between the Economic Relation Division (ERD) and World Bank under the ‘Bangladesh-First Recovery and Resilience Development Policy Credit (DPCI)’.
ERD Secretary Fatima Yasmin and Mohammad Anis, acting country director of the World Bank in Bnagladesh signed the loan agreement on behalf of their respective sides.
In response to the adverse effects of Covid-19, the government has provided stimulus incentives to economically affected industries, agriculture sector and export-oriented Industries and to ensure food security, the government extended the social safety net programs and employment creation.
Also read: World Bank projects developing East Asia Pacific to grow 5 pct in 2022
The WB has agreed to provide $250 million as Budget Support, titled `Bangladesh-First Recovery and Resilience Development Policy Credit (DPC1)', which will play a key role in sustaining the post Covid-19 economic recovery and development momentum.
The DPC series will provide $500 million in two consecutive Fiscal Years 2021-22 and 2022-23. The remaining objectives of the DPC are to assist Bangladesh in its efforts to implement budget stimulus for the subsequent recovery of Covid-19 and to enhance resilience to future shocks.
The interest rate of the above-mentioned loan is 1.25 percent, and the service charge at the rate of 0.75 percent, and this loan has to be repaid in 30 years with a grace period of 5 years.
Also read: World Bank okays $358 million fund to improve road safety in Bangladesh
Bangladesh’s creditworthiness becomes high after graduation from LDC
Bangladesh’s graduation to lower middle income country from low income bracket has improved the credit worthiness of the country, according to an official document.
This has also opened new windows for financing of Bangladesh development projects by the World Bank and other development partners with slightly higher interest rates, says the document obtained by UNB.
In line with the Public Money and Budget Management Act, 2009, the government aims at minimizing interest costs and risks by choosing an appropriate borrowing mix.
Also read: International solidarity key to achieving DPoA for LDCs: Bangladesh
The document says Bangladesh's concessional financing facilities from bilateral and multilateral development partners has shrunk slightly in the recent past as the country elevated itself into the lower middle income status.
The government has been pursuing a medium term deficit financing strategy to strike a balance between domestic and external source as interest rate of foreign loans is still cheaper than
that of domestic loans despite some foreign exchange risk.
Further, the document mentions, global interest rate is likely to remain reasonably low as the global economic recovery might be delayed due to the advent of new variants of COVID-19 amid supply shortage of vaccine doses across the globe.
Therefore, deciding on an appropriate borrowing mix between external and domestic source is critical to reduce overall financing cost and slowing down accumulation of debt stock.
As the government meets the major share of its financing requirements from domestic sources, appropriate borrowing mix between bank and non-bank financing is critical to reduce domestic
debt servicing cost, and hence the overall financing cost.
The official document says the government has been trying to reduce the share of nonbank financing in its domestic portfolio towards relatively cheaper bank financing by implementing several reform measures in the National Saving scheme, postal saving scheme, and the postal banking system.
For instance, it says, NID-based national database is being used to sell NSCs to ensure that any individual cannot cross his maximum allowable limit of investment in NSCs and the source tax on interest income from NSCs was raised to 10 per cent from 5 per cent since fiscal 2019-20.
Besides, the postal savings scheme and the postal banking system have also been automated to improve efficiency in government financing.
Also read: Bangladesh to enjoy DFQF market access to Australia in post-LDC period
To widen the scope for domestic financing the government has been taking various reform measures to increase the depth of the domestic bond market, the document adds.
The government has introduced a Shariah-compliant bond called 'Sukuk' in fiscal 2020-21.
The fund raised by the Sukuk will be invested in a large infrastructure project titled "Safe Water Supply for the Whole Country".
The Shukuk could be a new frontier for financing large infrastructure projects by the government and thus, could reduce government's dependence on foreign finance which is not always easily accessible.
It could also ease pressure on the domestic market as the government might reduce its dependence on traditional financing such as bank borrowing or nonbank borrowing by issuing NSC.
World Bank says war shocks to drag on Asian economies
Disruptions to supplies of commodities, financial strains and higher prices are among the impacts of the war in Ukraine that will slow economies in Asia in coming months, the World Bank says in a report released Tuesday.
The report forecasts slower growth and rising poverty in the Asia-Pacific region this year as “multiple shocks” compound troubles for people and for businesses.
Growth for the region is estimated at 5%, down from the original forecast of 5.4%. The “low case” scenario foresees growth dipping to 4%, it said. The region saw a rebound to 7.2% growth in 2021 after many economies experienced downturns with the onset of the pandemic.
Also read: World Bank projects developing East Asia Pacific to grow 5 pct in 2022
The World Bank anticipates that China, the region’s largest economy, will expand at a 5% annual pace, much slower than the 8.1% growth of 2021.
Russia's invasion of Ukraine has helped drive up prices for oil, gas and other commodities, eating into household purchasing power and burdening businesses and governments that already are contending with unusually high levels of debt due to the pandemic, the report said.
The development lending institution urged governments to lift restrictions on trade and services to take advantage of more opportunities for trade and to end fossil fuel subsidies to encourage adoption of more green energy technologies.
“The succession of shocks means that the growing economic pain of the people will have to face the shrinking financial capacity of their governments,” said the World Bank's East Asia and Pacific Chief Economist Aaditya Mattoo. “A combination of fiscal, financial and trade reforms could mitigate risks, revive growth and reduce poverty.”
The report pointed to three main potential shocks for the region: the war, changing monetary policy in the U.S. and some other countries and a slowdown in China.
Also read: Sri Lanka wants Bangladeshi investment in tourism, agriculture sector
While rising interest rates make sense for cooling the U.S. economy and curbing inflation, much of Asia lags behind in its recovery from the pandemic. Countries like Malaysia may suffer outflows of currency and other financial repercussions from those changing policies, it said.
Meanwhile, China's already slowing economy could falter as outbreaks of COVID-19 provoke lockdowns like the one now in place in Shanghai, the country's biggest megacity. That is likely to affect many Asian countries whose trade relies on demand from China.
“These shocks are likely to magnify existing post-COVID difficulties," the report said. The 8 million households whose members fell back into poverty during the pandemic, “will see real incomes shrink even further as prices soar."
The report noted that regional economies fared better during the 2021 Delta variant waves of coronavirus than in the initial months of the pandemic in 2020, largely because fewer restrictions were imposed and widespread vaccinations helped limit the severity of the outbreaks.
On average, countries with a 1 percentage point higher vaccination rate had higher growth, it said.
World Bank projects developing East Asia Pacific to grow 5 pct in 2022
The developing East Asia and Pacific countries is projected to grow by 5 percent in 2022 amid the resurgence of COVID-19 pandemic, tighter financial conditions and the Russia-Ukraine war, the World Bank said Monday.
"Shocks emanating from the war in Ukraine and the sanctions on Russia are disrupting the supply of commodities, increasing financial stress, and dampening global growth," said the World Bank's newly released East Asia and Pacific Economic Update.
Also Read: World Bank Recruitment 2022: Job opportunities at the World Bank, workplace Dhaka
"Just as the economies of East Asia and the Pacific were recovering from the pandemic-induced shock, the war in Ukraine is weighing on growth momentum," said World Bank Vice President for East Asia and Pacific Manuela V. Ferro. "The region's largely strong fundamentals and sound policies should help it weather these storms."
Surging U.S. inflation could provoke faster-than-anticipated financial tightening, perhaps timely in the United States but "too early" in many East Asia and Pacific countries where recovery is "incomplete," according to the report. The risk of capital outflows, which could put pressure on some countries' currencies, could induce "premature" financial tightening.
Overall economic growth in developing East Asia and Pacific countries is projected to slow to 5 percent in 2022, 0.4 of a percentage point less than expected in October, the World Bank noted, adding that if global conditions worsen and national policy responses are weak, growth in the region could slow to 4 percent.
Also Read: World Bank okays $358 million fund to improve road safety in Bangladesh
To mitigate the risks and grasp the opportunities, the World Bank urged governments to enhance efficiency of fiscal policy for recovery and growth, and strengthen macroprudential policies to mitigate risks from global financial tightening.
It also called on policymakers to reform trade-related policies in goods and, especially, in still-protected services sectors to take advantage of shifts in the global trade landscape, and encourage diffusion of technology.
World Bank okays $358 million fund to improve road safety in Bangladesh
The World Bank on Tuesday approved $358 million of financing to help Bangladesh improve road safety, reduce fatalities and injuries from road traffic crashes in selected high-risk highways and district roads.
In two national highways—N4 (Gazipur-Elenga) and N6 (Natore to Nawabganj)—the project will pilot comprehensive road safety measures, including improved engineering designs, signing and marking, pedestrian facilities, speed enforcement, emergency care.
Read:WB approves $120 mln loan to develop climate smart agriculture, water management
These measures will help reduce road traffic deaths by more than 30 percent on these two highways.
“Road accidents are the leading cause of permanent disability, and the fourth leading cause for children’s death. They disproportionately affect poor families. For Bangladesh, improving road safety is a critical economic and development priority,” said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan.
“This is the first dedicated road safety project in South Asia supported by the World Bank. It will help Bangladesh develop a comprehensive program to improve road safety management and minimize tragic loss of human lives.”
The costs related to traffic crashes can be as high as 5.1 percent of the GDP. Unsafe and under-invested road infrastructure is one of the key factors for crashes. With a sharp increase in the number of vehicles including two-wheelers, safety inspections for the registered vehicles remain inadequate, said a World Bank press release.
The project will support development of a long-term national program and a National Road Safety Strategic Action Plan to improve road safety through stronger coordination among ministries and strengthening the institutional framework, it said.
The project will also undertake road safety pilots in selected urban areas and district roads. It will help modernize the capacity of the Traffic Police and highway patrol to manage speeding and prevent risky road user behavior through instilling a combination of automated enforcement systems, such as CCTVs, electronic messaging, and physical measures to slow down traffic speed, including patrol vehicles and crash scene clearing equipment.
Read: WB approves $300 million to help Bangladesh bolster its urban bodies
It will improve post-crash care, which is critical in saving lives. In 2016, about two-thirds of the road crash victims died on the way to a hospital. It will set up an ambulance service via a toll-free number and upgraded emergency care services in selected district hospitals, and Upazila Health Complexes along the two national highway corridors.
It will provide training to medical providers on trauma care and help develop standards, protocols, and operational policies for emergency medical care services.
It will create crash database and implement integrated traffic management and incident detection system. ICT systems will support the integration of existing information systems and databases of vehicle registration, driver licensing, and payments. The project will undertake campaigns to create road safety awareness and behavioral change.
“Investment in Road Safety Programs will be fruitful when they are matched with proper institutional setup, legislative framework, and efficient monitoring systems,” said Dipan Bose, World Bank Senior Transport Specialist and Task Team Leader of the project
“With three related ministries, Road Transport and Bridges, Health and Home Affairs joining together, this project is an example of the government’s commitment to stronger road safety management.”
The project will establish a training center for Bangladesh Police to strengthen capacity on modern road safety enforcement. It will also develop a comprehensive training program for commercial drivers.
The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing, has a 30-year term, including a five-year grace period.
World Bank Recruitment 2022: Job opportunities at the World Bank, workplace Dhaka
The World Bank has published a recruitment notice in Bangladesh. The company will appoint officers to the position of Financial Sector Specialist in Bangladesh. Interested candidates need to apply online.
Position Name: Financial Sector Specialist
Number of posts: 1
World Bank Job in Dhaka
Also Read: Job Circular at DNCC: Job opportunities in Dhaka North City Corporation, post 202
Qualifications and Experience:
Must have a master's degree in finance, economics, management or similar. Must have at least 5 years of working experience in the relevant field in government / private financial institution or central bank of the country. Must be fluent in English and Bengali.
Job type: Three year contract
Work place: Dhaka
How to apply for World Bank Job
Interested candidates should apply by clicking on this link to know the details of recruitment from the link of World Bank website. Link; https://worldbankgroup.csod.com/ats/careersite/JobDetails.aspx?id=16540&site=1
Application deadline: March 26, 2022.
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