The global economy’s “speed limit”—the maximum long-term rate at which it can grow without sparking inflation—is set to slump to a three-decade low by 2030. An ambitious policy push is needed to boost productivity and the labor supply, ramp up investment and trade, and harness the potential of the services sector, a new World Bank report shows.

The report, Falling Long-Term Growth Prospects: Trends, Expectations, and Policies, offers the first comprehensive assessment of long-term potential output growth rates in the aftermath of the COVID-19 pandemic and the Russian invasion of Ukraine. These rates can be thought of as the global economy’s “speed limit.”

The report documents a worrisome trend: nearly all the economic forces that powered progress and prosperity over the last three decades are fading. As a result, between 2022 and 2030 average global potential GDP growth is expected to decline by roughly a third from the rate that prevailed in the first decade of this century—to 2.2% a year. For developing economies, the decline will be equally steep: from 6% a year between 2000 and 2010 to 4% a year over the remainder of this decade. These declines would be much steeper in the event of a global financial crisis or a recession.

“A lost decade could be in the making for the global economy,” said Indermit Gill, the World Bank’s Chief Economist and Senior Vice President for Development Economics. “The ongoing decline in potential growth has serious implications for the world’s ability to tackle the expanding array of challenges unique to our times—stubborn poverty, diverging incomes, and climate change. But this decline is reversible. The global economy’s speed limit can be raised—through policies that incentivize work, increase productivity, and accelerate investment.”

The analysis shows that potential GDP growth can be boosted by as much as 0.7 percentage points—to an annual average rate of 2.9%—if countries adopt sustainable, growth-oriented policies. That would convert an expected slowdown into an acceleration of global potential GDP growth.

“We owe it to future generations to formulate policies that can deliver robust, sustainable, and inclusive growth,” said Ayhan Kose, a lead author of the report and Director of the World Bank’s Prospects Group. “A bold and collective policy push must be made now to rejuvenate growth. At the national level, each developing economy will need to repeat its best 10-year record across a range of policies. At the international level, the policy response requires stronger global cooperation and a reenergized push to mobilize private capital.”

The report lays out an extensive menu of achievable policy options, breaking new ground in several areas. It introduces the world’s first comprehensive public database of multiple measures of potential GDP growth—covering 173 economies from 1981 through 2021. It is also the first to assess how a range of short-term economic disruptions—such as recessions and systemic banking crises—reduce potential growth over the medium term.

“Recessions tend to lower potential growth,” said Franziska Ohnsorge, a lead author of the report and Manager of the World Bank’s Prospects Group. “Systemic banking crises do greater immediate harm than recessions, but their impact tends to ease over time.”

The report highlights specific policy actions at the national level that can make an important difference in promoting long-term growth prospects:

Align monetary, fiscal, and financial frameworks: Robust macroeconomic and financial policy frameworks can moderate the ups and downs of business cycles. Policymakers should prioritize taming inflation, ensuring financial-sector stability, reducing debt, and restoring fiscal prudence. These policies can help countries attract investment by instilling investor confidence in national institutions and policymaking.

Ramp up investment: In areas such as transportation and energy, climate-smart agriculture and manufacturing, and land and water systems, sound investments aligned with key climate goals could enhance potential growth by up to 0.3 percentage point per year as well as strengthen resilience to natural disasters in the future.

Cut trade costs: Trade costs—mostly associated with shipping, logistics, and regulations—effectively double the cost of internationally traded goods today. Countries with the highest shipping and logistics costs could cut their trade costs in half by adopting the trade-facilitation and other practices of countries with the lowest shipping and logistics costs. Trade costs, moreover, can be reduced in climate-friendly ways—by removing the current bias toward carbon-intensive goods inherent in many countries’ tariff schedules and by eliminating restrictions on access to environmentally friendly goods and services.

Capitalize on services: The services sector could become the new engine of economic growth. Exports of digitally delivered professional services related to information and communications technology climbed to more than 50% of total services exports in 2021, up from 40%in 2019. The shift could generate important productivity gains if it results in better delivery of services. 

Increase labor force participation: About half of the expected slowdown in potential GDP growth through 2030 will be attributable to changing demographics—including a shrinking working-age population and declining labor force participation as societies age. Boosting overall labor force participation rates by the best ten-year increase on record could increase global potential growth rates by as much as 0.2 percentage point a year by 2030. In some regions—such as South Asia and the Middle East and North Africa—increasing female labor force participation rates to the average for all emerging market and developing economies could accelerate potential GDP growth by as much as 1.2 percentage points a year between 2022 and 2030.

The report also underscores the need to strengthen global cooperation. International economic integration has helped to drive global prosperity for more than two decades since 1990, but it has faltered. Restoring it is essential to catalyze trade, accelerate climate action, and mobilize the investments needed to achieve the Sustainable Development Goals.

The global pace of reforms toward equal treatment of women under the law has slumped to a 20-year low, constituting a potential impediment to economic growth at a critical time for the global economy, a new World Bank report shows.

In 2022, the global average score on the World Bank’s Women, Business and the Law index rose just half a point to 77.1—indicating women, on average, enjoy barely 77 percent of the legal rights that men do. At the current pace of reform, in many countries a woman entering the workforce today will retire before she will be able to gain the same rights as men, the report notes.

“At a time when global economic growth is slowing, all countries need to mobilize their full productive capacity to confront the confluence of crises besetting them,” said Indermit Gill, Chief Economist of the World Bank Group and Senior Vice President for Development Economics. “Governments can’t afford to sideline as much as half of their population. Denying equal rights to women across much of the world is not just unfair to women; it is a barrier to countries’ ability to promote green, resilient, and inclusive development.”

Women, Business and the Law 2023 assesses 190 countries’ laws and regulations in eight areas related to women’s economic participation—mobility, workplace, pay, marriage, parenthood, entrepreneurship, assets, and pensions. The data—which are current through Oct. 1, 2022—offer objective and measurable benchmarks for global progress toward legal gender equality. Today, just 14 countries—all high-income economies—have laws that give women the same rights as men.

Worldwide, nearly 2.4 billion women of working age still do not have the same rights as men. Closing the gender employment gap could raise long-term GDP per capita by nearly 20% on average across countries. Studies estimate global economic gains of $5-6 trillion if women started and scaled new businesses at the same rate as men do.

In 2022, only 34 gender-related legal reforms were recorded across 18 countries—the lowest number since 2001. Most reforms focused on increasing paid leave for parents and fathers, removing restrictions to women’s work, and mandating equal pay. It will take another 1,549 reforms to reach substantial legal gender equality everywhere in the areas measured by the report. At the current pace, the report, notes, it would take at least 50 years on average to reach that target.

The latest Women, Business and the Law report provides a comprehensive assessment of global progress toward gender equality in the law over the past 50 years. Since 1970, the global average Women, Business and the Law score has improved by about 2/3, rising from 45.8 to 77.1 points.

The first decade of this century saw strong gains towards legal gender equality. Between 2000 and 2009, over 600 reforms were introduced, with a peak of 73 annual reforms in 2002 and 2008. Since then, reform fatigue seems to have set in—particularly in areas that involve long-established norms, such as the rights of women to inherit and own property. New analysis of the data shows that economies with historically larger legal gender gaps have been catching up, especially since 2000.

Currently, equality of economic opportunity for women is highest in OECD high-income economies but important reforms have continued in developing economies. Sub-Saharan Africa made significant progress last year. The region accounted for over half of all reforms worldwide in 2022, with seven economies—Benin, the Republic of Congo, Côte d’Ivoire, Gabon, Malawi, Senegal, and Uganda—enacting 18 positive legal changes.

Although great achievements have been made over the last five decades, more needs to be done worldwide to ensure that good intentions are accompanied by tangible results —that is, equal opportunity under the law for women. Women cannot afford to wait any longer to reach gender equality. Neither can the global economy.

Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine, according to the World Bank’s latest Global Economic Prospects report.

 Given fragile economic conditions, any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions—could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.

 The global economy is projected to grow by 1.7% in 2023 and 2.7% in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies.

 Over the next two years, per-capita income growth in emerging market and developing economies is projected to average 2.8%—a full percentage point lower than the 2010-2019 average. In Sub-Saharan Africa—which accounts for about 60% of the world’s extreme poor—growth in per capita income over 2023-24 is expected to average just 1.2%, a rate that could cause poverty rates to rise, not fall.

 “The crisis facing development is intensifying as the global growth outlook deteriorates,” said World Bank Group President David Malpass. “Emerging and developing countries are facing a multi-year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates. Weakness in growth and business investment will compound the already-devastating reversals in education, health, poverty, and infrastructure and the increasing demands from climate change.”

 Growth in advanced economies is projected to slow from 2.5% in 2022 to 0.5% in 2023. Over the past two decades, slowdowns of this scale have foreshadowed a global recession. In the United States, growth is forecast to fall to 0.5% in 2023—1.9 percentage points below previous forecasts and the weakest performance outside of official recessions since 1970. In 2023, euro-area growth is expected at zero percent—a downward revision of 1.9 percentage points. In China, growth is projected at 4.3% in 2023—0.9 percentage point below previous forecasts.

 Excluding China, growth in emerging market and developing economies is expected to decelerate from 3.8% in 2022 to 2.7% in 2023, reflecting significantly weaker external demand compounded by high inflation, currency depreciation, tighter financing conditions, and other domestic headwinds.

By the end of 2024, GDP levels in emerging and developing economies will be roughly 6% below levels expected before the pandemic. Although global inflation is expected to moderate, it will remain above pre-pandemic levels.

 The report offers the first comprehensive assessment of the medium-term outlook for investment growth in emerging market and developing economies. Over the 2022-2024 period, gross investment in these economies is likely to grow by about 3.5% on average—less than half the rate that prevailed in the previous two decades. The report lays out a menu of options for policy makers to accelerate investment growth.

 “Subdued investment is a serious concern because it is associated with weak productivity and trade and dampens overall economic prospects. Without strong and sustained investment growth, it is simply impossible to make meaningful progress in achieving broader development and climate-related goals,” said Ayhan Kose, Director of the World Bank’s Prospects Group. “National policies to boost investment growth need to be tailored to country circumstances but they always start with establishing sound fiscal and monetary policy frameworks and undertaking comprehensive reforms in the investment climate.”

 The report also sheds light on the dilemma of 37 small states—countries with a population of 1.5 million or less. These states suffered a sharper COVID-19 recession and a much weaker rebound than other economies, partly because of prolonged disruptions to tourism. In 2020, economic output in small states fell by more than 11%— seven times the decline in other emerging and developing economies. The report finds that small states often experience disaster-related losses that average roughly 5% of GDP per year. This creates severe obstacles to economic development.

 Policymakers in small states can improve long-term growth prospects by bolstering resilience to climate change, fostering effective economic diversification, and improving government efficiency. The report calls upon the global community to assist small states by maintaining the flow of official assistance to support climate-change adaptation and help restore debt sustainability.

The poorest countries eligible to borrow from the World Bank’s International Development Association (IDA) now spend over a tenth of their export revenues to service their long-term public and publicly guaranteed external debt—the highest proportion since 2000, shortly after the Heavily Indebted Poor Countries (HIPC) initiative was established, the World Bank’s new International Debt Report shows.

The report highlights rising debt-related risks for all developing economies—low- as well as middle-income economies. At the end of 2021, the external debt of these economies totaled $9 trillion, more than double the amount a decade ago. During the same period, the total external debt of IDA countries, meanwhile, nearly tripled to $1 trillion. Rising interest rates and slowing global growth risk tipping a large number of countries into debt crises. About 60% of the poorest countries are already at high risk of debt distress or already in distress.

At the end of 2021, IDA-eligible countries’ debt-service payments on long-term public and publicly guaranteed external debt totaled $46.2 billion—equivalent to 10.3% of their exports of goods and services and 1.8% of their gross national income (GNI), according to the report. Those percentages were up significantly from 2010, when they stood at 3.2% and 0.7% respectively. In 2022, IDA countries’ debt-service payments on their public and publicly guaranteed debt are projected to rise by 35 percent to more than $62 billion, one of the highest annual increases of the past two decades. China is expected to account for 66% of the debt-service payments to be made by IDA countries on their official bilateral debt.

“The debt crisis facing developing countries has intensified,” said World Bank Group President David Malpass. “A comprehensive approach is needed to reduce debt, increase transparency, and facilitate swifter restructuring—so countries can focus on spending that supports growth and reduces poverty. Without it, many countries and their governments face a fiscal crisis and political instability, with millions of people falling into poverty.”

On the surface, debt indicators seem to have improved in 2021, the report shows. As economic growth resumed following the global recession in 2020, public and publicly guaranteed external debt as a share of GNI returned to pre-pandemic proportions. However, this was not the case for IDA countries, where the debt- to-GNI ratio remained above the pre-pandemic level at 25%. Moreover, the economic outlook has deteriorated considerably.

In 2022, global growth is slowing sharply. Amid one of the most internationally synchronous episodes of monetary and fiscal policy tightening the world has seen in 50 years, the risk of a global recession next year has been rising. Currency depreciations have made matters worse for many developing countries whose debt is denominated in U.S. dollars. The 2021 debt-to-GNI improvement, as a result, is likely temporary.

Over the past decade, the composition of debt owed by IDA countries has changed significantly. The share of external debt owed to private creditors has increased sharply. At the end of 2021, low- and middle-income economies owed 61% of their public and publicly guaranteed debt to private creditors—an increase of 15 percentage points from 2010. IDA-eligible countries owed 21% of their external debt to private creditors by the end of last year, a 16-point increase from 2010. Also, the share of debt owed to government creditors that don’t belong to the Paris Club (such as China, India, Saudi Arabia, United Arab Emirates, and others) has soared. At the end of 2021, China was the largest bilateral lender to IDA countries, accounting for 49% of their bilateral debt stock—up from 18% in 2010. These developments have made it much harder for countries facing debt distress to quickly restructure their debt.

The rising debt vulnerabilities underscore the urgent need to improve debt transparency and provide more complete debt information to strengthen countries’ ability to manage debt risks and use resources efficiently for sustainable development.

“Poor debt transparency is the reason so many countries sleepwalk into a debt crisis,” said Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group. “Complete, transparent debt data improves debt management. It makes debt sustainability analyses more reliable. And it makes debt restructurings easier to implement, so that countries can return quickly to economic stability and growth. It is not in any creditor’s long-term interest to keep public debt hidden from the public.”

The new International Debt Report reflects an advance in debt transparency. It draws from the World Bank’s International Debt Statistics database—the most comprehensive source of comparable cross-country information on the external debt of low- and middle-income countries. It improves on the earlier International Debt Statistics reports by adding substantive analysis and expanding both the breadth and specificity of the data in it.

Over the past five years, the International Debt Statistics database has identified and added $631 billion of previously unreported loan commitments, and an additional $44 billion were identified in 2021. The total of these newly documented additional loan commitments over the past five years is equivalent to more than 17% of the total outstanding public and publicly guaranteed debt stock in 2021.

Thank you, Your Excellency Samia Suluhu Hassan, for taking the leadership in organizing this important event. I was very interested in the remarks by the Presidents of Malawi, Zimbabwe, Zambia, Botswana and others.  I also want to the President of Mozambique for hosting several of us earlier this afternoon to discuss early warning systems and sustainable management of Miombo forests.

This conversation on the role of regional interconnections in integrating renewable energy at scale is critical in ensuring that the energy transition happens with the right balance of dependable supply, affordability, and environmental sustainability.

Southern Africa is generously endowed with renewable energy resources, an abundance of sun in Botswana, Namibia and South Africa, and hydro resources in Mozambique, Tanzania, Zambia and Zimbabwe. These resources are not evenly distributed and, therefore, enhanced regional integration to tap into each other’s resources can reduce economic and financial costs. Through deepened regional integration countries can become both suppliers and purchasers of electricity during times of excess capacity and when deficits occur due to the time of day, season, climate shocks and operational constraints. For example, the proposed Mega Solar Initiative which seeks to unlock about 5GW of renewable solar energy in Namibia and Botswana could also contribute to alleviate the power deficit in the region and make good use of hydro assets in the north of region for balancing and storing the variable renewable energy.

Increasingly, energy transition is underpinned by regional integration of power systems to enable clean energy resources to be harnessed at scale and greater knowledge exchange and leap frogging. Regional power pools in Africa are spearheading efforts to integrate national power systems and harmonizing regulatory and operational frameworks.

The Southern African Power Pool (SAPP) is one of the most advanced power pools not only in Africa but also beyond. Trading through the centralized market has been growing and members have been benefitting from the lower costs. Yet, there is substantial scope for much more trading and for members to realize more benefits from integration, and to ensure SAPP remains on the leading edge.

There are four potential important gains from increased regional power sector integration through renewable energies:

(i)           savings in generation and transmission costs of up to $42 billion until 2040,

(ii)          better management of variable renewable energy and seasonal imbalances,

(iii)         supporting decarbonization and resilience of the regional grids, and

(iv)         increasing grid densification to support and complement electricity access programs and the digital agenda.

Unlocking renewable energy and power trade potential requires a comprehensive approach, with parallel efforts at regional and national levels. Several key interconnections, across three corridors (East, Central and West), have already been identified by SAPP and require investments in the order of $2 billion. The World Bank along with the African Development Bank, and other cooperating partners is supporting SAPP to develop the Regional Transmission Infrastructure Financing Facility (RTIFF), an innovative financing mechanism aimed at unlocking current constraints and to crowd in the public and private sector financing required.

The World Bank Group remains committed to supporting Africa in promoting increased interconnectivity, decarbonization and access to electricity. This morning we launched SCALE, a new multi-partner initiative that aims to bring global community resources – including grants and concessional loans – to support greenhouse gas reductions in developing countries.  We also support faster debt reduction efforts for countries with unsustainable debt – this will free up vital resources for development and climate action.  

Our commitment to Africa is reflected in the current active portfolio of regional integration programs across the African continent in the amount of $19 billion, ranging from common infrastructure to building the joint capacity and systems for coordinated action on, among others, food systems, digital development, trade, and energy markets.

Our active portfolio of regional energy projects amounts to around US$6 billion, including US$ 1.2 billion in Southern Africa. We are keen to provide additional support. I note that this is in addition to our current portfolio of energy access operations which amounts to US$8 billion, and when completed, it will provide energy access to 75 million people in Sub-Saharan Africa.

In conclusion, I would like to reiterate the WBG’s commitment to supporting the innovative solutions that SAPP is developing to leverage private and climate funding.  Thank you and I look forward to a good discussion today.

Today the World Bank announced a new multi-partner fund that will pool funding from the global community — including donor countries, the private sector and foundations — for scalable pathways to greenhouse gas emission reduction. The Scaling Climate Action by Lowering Emissions (SCALE) partnership will provide grants for verifiable emissions reductions and expand the funding sources for global public goods.

 “Climate finance needs major new mechanisms that pool funding from the global community to accomplish actual reductions in greenhouse gas emissions across the developing world. SCALE offers a key non-fragmented avenue for the global community to take action on climate change,” said David Malpass, President of the World Bank Group. “The verifiable emission reductions created by SCALE and similar mechanisms will also be an important step toward building effective carbon credit markets.”

 SCALE will deploy Results-Based Climate Finance where countries receive grant payments for achieving pre-agreed, verifiable results, drawing on twenty years of World Bank Group experience in this area.

 SCALE will support countries to build a track record of generating emission reductions from impactful programs and policies that they can apply toward their national emission reduction targets. SCALE will also yield excess credits that can be offered in carbon markets with the potential to unlock additional private sector funding.

 SCALE will pool public and private resources to (i) channel additional funding to middle and low-income countries’ emission reduction programs; (ii) help bridge the gap between the supply of and demand for high-quality emission reduction credits by supporting large-scale climate investments; and (iii) help countries develop high integrity credits and enhance their access to international carbon markets.

 Social inclusion is embedded in the design of all SCALE programs. An associated fund within the SCALE umbrella – Enabling Access to Benefits while Lowering Emissions (EnABLE) – enhances the inclusion of marginalized communities and indigenous peoples in programs under the partnership through specially designed benefit sharing arrangements.

The shrinking value of the currencies of most developing economies is driving up food and fuel prices in ways that could deepen the food and energy crises that many of them already face, according to the World Bank’s latest Commodity Markets Outlook report.

In U.S. dollar terms, the prices of most commodities have declined from their recent peaks amid concerns of an impending global recession, the report documents. From the Russian invasion of Ukraine in February 2022 through the end of last month, the price of Brent crude oil in U.S. dollars fell nearly 6%. Yet, because of currency depreciations, almost 60% of oil-importing emerging-market and developing economies saw an increase in domestic-currency oil prices during this period. Nearly 90% of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars.

Elevated prices of energy commodities that serve as inputs to agricultural production have been driving up food prices. During the first three quarters of 2022, food-price inflation in South Asia averaged more than 20%. Food price inflation in other regions, including Latin America and the Caribbean, the Middle East and North Africa, Sub-Saharan Africa, and Eastern Europe and Central Asia, averaged between 12 and 15%. East Asia and the Pacific has been the only region with low food-price inflation, partly because of broadly stable prices of rice, the region’s key staple.

“Although many commodity prices have retreated from their peaks, they are still high compared to their average level over the past five years,” said Pablo Saavedra, the World Bank’s Vice President for Equitable Growth, Finance, and Institutions. “A further spike in world food prices could prolong the challenges of food insecurity across developing countries. An array of policies is needed to foster supply, facilitate distribution, and support real incomes.”

Since the outbreak of the war in Ukraine, energy prices have been quite volatile but are now expected to decline. After surging by about 60% in 2022, energy prices are projected to decline 11% in 2023. Despite this moderation, energy prices next year will still be 75% above their average over the past five years.

The price of Brent crude oil is expected to average $92 a barrel in 2023—well above the five-year average of $60 a barrel. Both natural gas and coal prices are projected to ease in 2023 from record highs in 2022. However, by 2024, Australian coal and U.S. natural-gas prices are still expected to be double their average over the past five years, while European natural gas prices could be nearly four times higher. Coal production is projected to significantly increase as several major exporters boost output, putting climate-change goals at risk.

“The combination of elevated commodity prices and persistent currency depreciations translates into higher inflation in many countries,” said Ayhan Kose, Director of the World Bank’s Prospects Group and EFI Chief Economist, which produces the Outlook report. “Policymakers in emerging market and developing economies have limited room to manage the most pronounced global inflation cycle in decades. They need to carefully calibrate monetary and fiscal policies, clearly communicate their plans, and get ready for a period of even higher volatility in global financial and commodity markets.”

Agricultural prices are expected to decline 5% next year. Wheat prices in the third quarter of 2022 fell nearly 20% but remain 24% higher than a year ago. The decline in agricultural prices in 2023 reflects a better-than-projected global wheat crop, stable supplies in the rice market, and the resumption of grain exports from Ukraine. Metal prices are projected to decline 15% in 2023, largely because of weaker global growth and concerns about a slowdown in China.

The outlook for commodity prices is subject to many risks. Energy markets face significant supply concerns as worries about the availability of energy during the upcoming winter will intensify in Europe. Higher-than-expected energy prices could feed through to non-energy prices, especially food, prolonging challenges associated with food insecurity. A sharper slowdown in global growth also presents a key risk, especially for crude oil and metals prices.

“The forecast of a decline in agricultural prices is subject to an array of risks,” said John Baffes, Senior Economist in the World Bank’s Prospects Group. “First, export disruptions by Ukraine or Russia could again interrupt global grain supplies. Second, additional increases in energy prices could exert upward pressure on grain and edible oil prices. Third, adverse weather patterns can reduce yields; 2023 is likely to be the third La Niña year in a row, potentially reducing yields of key crops in South America and Southern Africa.”

Concerns about a possible global recession next year have already contributed to a sharp decline in copper and aluminum prices. A Special Focus section of the report examines the drivers of aluminum and copper prices and explores implications for emerging market and developing economies that export these commodities. Prices will likely remain volatile as the energy transition unfolds and demand shifts from fossil fuels to renewables, which will benefit some metal producers. Metal exporters can make the most of the resulting opportunities for growth over the medium term while limiting the impact of price volatility by ensuring they have well-designed fiscal and monetary policy frameworks, the report highlights.

In fiscal 2022, the World Bank Group delivered a record US$31.7 billion in fiscal year 2022 (FY22) to help countries address climate change, a 19% increase from the US$26.6 billion all-time high in financing reached in the previous fiscal year. The Bank Group continues to be the largest multilateral financier of climate action in developing countries.

“In our last fiscal year ending June 2022, we provided a record US$31.7 billion to countries to identify and enable high-priority climate-related projects as part of their development plans.” said David Malpass, President of the World Bank Group. “We will continue providing solutions to pool funding from the global community for impactful and scalable projects that reduce GHG emissions, improve resilience, and enable the private sector.”

Financing for climate action in FY22—which covers July 1, 2021, to June 30, 2022—reached 36% of total Bank Group financing. This exceeds the target set in the Group’s Climate Change Action Plan for 2021-2025 to deploy an average of 35% of the institution’s financing in support of climate action.

IBRD and IDA together delivered $26.2 billion in FY22 in climate finance. Nearly half of that—$12.9 billion—specifically supported investments in adaptation and resilience. IFC, the private sector arm of the World Bank Group, delivered an unprecedented $4.4 billion in climate finance and mobilized an additional $3.3 billion from other sources. MIGA, the World Bank Group’s political risk insurance and credit enhancement arm, delivered $1.1 billion in climate finance.

As part of its ongoing effort to help countries integrate climate and development objectives, the Bank Group recently launched a number of Country Climate and Development Reports (CCDRs). CCDRs are a new core diagnostic to help countries prioritize the most impactful actions that can reduce GHG emissions and boost adaptation. A summary of the preliminary findings of these reports will be published in coming months to foster action-oriented discussion in the global community.

By Atem Thomas Ashu

Environmental Affairs editor