Rate hikes, Ukraine war behind slowing global economy

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Rate hikes, Ukraine war behind slowing global economy
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'By the end of next year, a third of the developing world will not meet the per-capita income level that they had at the end of 2019.' 9News

That's the latest outlook of the World Bank, a 189-country anti-poverty agency, which estimates that the international economy will expand just 2.1 per cent in 2023 after growing 3.1 per cent in 2022.

The United States Federal Reserve and other major central banks have been aggressively raising interest rates to combat a resurgence of inflation, set off by a stronger-than-expected rebound from the pandemic recession, persistent supply shortages and energy and food price shocks caused by the Ukraine war.

But the global economy has proved surprisingly resilient in the face of higher borrowing costs, and the World Bank predicts that growth will accelerate to 2.4 per cent in 2024. Chinese workers assemble lithium batteries at a factory in eastern China. The rising superpower holds a monopoly on rare earth minerals - crucial components in everyday technology and weapon systems.

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