“Core inflation in the US and EU remains elevated, and labour markets remain tight, suggesting interest rates will remain higher than pre-pandemic levels in the foreseeable future,” the World Bank said of downside risks. “Political developments within countries as well as rising geopolitical tensions are fuelling uncertainty.”
The World Bank also aired a warning about the sharp increase in debt in the region, which keeps borrowing costs high and squeezes both consumption and investment. Corporate debt in China and Vietnam has risen by more than 40 percentage points of GDP since 2010 and exceeded the level in advanced economies, it…