By Tuba Sahin
ANKARA (AA) - Global energy production may take years to diversify away from Russia, prolonging the risk of stagflation, the World Bank president has warned.
Speaking at California’s Stanford University, David Malpass on Wednesday said the likelihood of a recession rose in Europe due to the weakness of the euro and high inflation, which further constrained the euro area's longer-term growth outlook.
"The developing world is facing an extremely challenging near-term outlook shaped by sharply higher food, fertilizer, and energy prices, rising interest rates and credit spreads, currency depreciation, and capital outflows," he said.
The sharp slowdown in global growth deepening into a global recession is a "pressing danger" to the developing world, he said.
"If current fiscal and monetary policies become the new normal, it implies heavy absorption of global capital by advanced governments prolonging the underinvestment in developing countries and hampering future growth," Malpass said, adding:
"The macroeconomic challenges facing development are consequential and are probably worsening."
Russian energy supplies have grown less accessible in Europe since it launched a war on neighboring Ukraine on Feb. 24.