The global economy now faces a danger of stagflation not seen since the 1970s, the World Bank warned on Tuesday.

“This time it is facing high inflation and slow growth at the same time,” said David Malpass, the bank’s president.

The global body on Monday sharply lowered its 2022 global growth forecast to 2.9%, significantly lower than January’s projection of 4.1%, saying that the possibility of high global inflation accompanied by tepid growth poses a key risk to the global economy.

“Even if a global recession is averted, the pain of stagflation could persist for several years,” Malpass said.

“Several years of above-average inflation and below-average growth are now likely, with potentially destabilizing consequences for low- and middle-income economies. There’s a severe risk of malnutrition and of deepening hunger and even of famine in some areas.”

Growth in developing economies is also projected to roughly fall in half this year, slowing from 6.6% in 2021 to 3.4% in 2022.

Russia's invasion of Ukraine has also pushed up agricultural commodity prices sharply, worsening food insecurity and extreme poverty in developing economies.

Global consumer price inflation has soared higher around the world and is above central bank targets in almost all countries. (Anadolu Agency)