The World Bank released on June 6, 2023 its “Global Economic Prospects – January 2023” report in which it estimated world economic growth to have dropped from around 6.0% in 2021 to 3.1% in 2022, projecting growth to attain 2.1% in 2023 (0.4 percentage points more than the January 2023 forecasts), 2.4% in 2024 and 3.0% in 2025. The better than expected performance in 2023 is attributed to resilient consumption in the U.S. and the quick economic reopening in China. Nevertheless, the overall economic performance in 2023 remains pale in the light of the global monetary policy tightening which aim at curbing high levels of inflation and disruptions from Russia’s invasion of Ukraine. Added to that is the recent turmoil in the global banking conditions, where banks in advanced economies suffered unrealized losses due to the hike in interest rates, which led to further tightening of credit conditions.  The report further added that while the spillover of the banking crisis from advanced economies to Emerging Markets & Developing Economies (EMDEs) has been limited, economies displaying more evident weaknesses in their macroeconomic policies, as indicated by lower credit ratings, have encountered sluggish economic expansion and heightened financial strain. This has manifested in significant devaluations of their currencies and a sharp widening of sovereign spreads. The report also commented that despite the efforts to combat inflation, it remains high and is expected to hover above its pre-pandemic levels during the year 2024. Energy prices, however, have fell markedly since their peak levels in 2022 on the back of lower world growth prospects. In the same vein, the World Bank expected growth in advanced economies to drop from 5.4% in 2021 to 2.6% in 2022 and 0.7% in 2023 and to rebound to 1.2% in 2024. The report further revealed that advanced economies are experiencing deteriorating economic conditions, high levels of inflation, and rapid monetary policy tightening yet indicated that robust wage growth has prevented consumption levels from further dropping and accordingly cushioned the drop in economic growth. Similarly, the World Bank projected economic growth in EMDEs to decrease from 6.9% in 2021 to 3.7% in 2022, and rebound to 4.0% in 2023 and 3.9% in 2024. According to the World Bank, economic activity in EMDEs is expected to improve mainly owing to China’s economic performance. On the regional front, the World Bank estimated economic growth in the Middle East & North Africa (MENA) region at 3.8% in 2021, with expectations of a growth of 5.9% in 2022, and a forecasted growth of 2.2% in 2023, 3.3% in 2024 and 3.0% in 2025. The World Bank commented that the MENA region’s growth in 2022 is the highest in a decade and can be attributed to the profits generated by oil exporters from the frantic increases in oil & gas prices. The World Bank commented that growth in oil exporting countries was estimated to have increased from 3.5% in 2021 to 6.4% in 2022 with projections to drop to 2.0% in 2023, 3.2% in 2024 and 2.7% in 2025. On the other hand, growth in oil importing economies was estimated to have dropped from 5.4% in 2021 to 3.9% in 2022 with a growth forecast of 3.4% in 2023, 3.9% in 2024 and 4.1% in 2025. According to the World Bank, oil importing economies have witnessed a drop in growth as inflationary pressures eroded purchasing power for consumers and raised the price of imported goods for production sectors. On the other hand, the recent drop in oil prices helped in narrowing the current account deficit for these countries. On a local basis, the World Bank expected Lebanon’s real GDP to have contracted by 21.4% in 2020, 7.0% in 2021 and 2.6% in 2022, projecting an economic contraction of 0.5% in 2023. The report noted that forecasts beyond the year 2023 for Lebanon were removed due to “a high degree of uncertainty”. According to the World Bank, Lebanon’s high inflation levels and policy uncertainty are impeding growth. Furthermore, real growth figures for Lebanon for the year 2022 were revised from those published in the January 2023 issue of the Global Economic Prospects report in which the World Bank had estimated an economic contraction of 5.4%.