World Bank slashes global growth forecast due to Russia's invasion of Ukraine and preps a relief package bigger than its COVID-19 funding

Russia's invasion of Ukraine sparked protests around the world and huge volatility in financial markets.

Henry Nicholls/Reuters

• The World Bank slashed its global growth forecast from 4.1% to 3.2% on Monday, pointing to the Russia-Ukraine war. 
• "Sixty percent of low-income countries are already in debt distress or at high risk of it," the World Bank said.
• It's preparing a $170 billion package in response to the war, a larger sum than its $157 billion COVID-19 package.

The World Bank cut its forecast for global growth for the year due to Russia's invasion of Ukraine and is preparing an aid package that is bigger than its COVID-19 response.

The international lender lowered its 2022 growth view from 4.1% to 3.2%, led by declines in Europe and Central Asia.

Additionally, debt-ridden, developing nations continue to struggle, and the World Bank hasn't yet finalized a strategy to alleviate concerns, President David Malpass said in a media call Monday.

"Countries are under severe financial stress," he said. "Sixty percent of low-income countries are already in debt distress or at high risk of it."

The World Bank's board will discuss a 15-month, $170 billion funding package to cover April 2022 through June 2023, he said. That exceeds the $157 billion of pandemic relief funds the World Bank mobilized. 

Last month, the World Bank announced a $3 billion package for Ukraine that it expects to distribute over the coming months, Bloomberg reported. 

Meanwhile, Russia is suffering from its own debt crisis as Western sanctions have crippled Moscow's ability to service foreign-currency bond payments while its economy is expected to crash by 15% this year.

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