World Bank says the economy is “perilously close” to going into recession.

The World Bank warned on Tuesday that weaker growth in all three of the world’s largest economies—the United States, Europe, and China—will bring the global economy “perilously close” to a recession this year.

The World Bank, which provides loans to less developed nations for development projects, stated in an annual report that it had nearly halved its previous global growth forecast from 3 percent to just 1.7 percent. If that prediction came true, it would rank behind only the severe recessions brought on by the 2008 global financial crisis and the 2020 coronavirus pandemic as the weakest annual expansion in the past 30 years.

Despite the World Bank’s forecast that the US economy will grow by just 0.5% this year, the global economic downturn will likely be a further obstacle for US businesses and consumers, on top of rising costs and higher borrowing costs. If COVID-19 keeps growing or Russia’s conflict in Ukraine worsens, the US will remain vulnerable to additional supply chain disruptions.

A weaker Chinese economy will probably hurt Europe, a long-time major exporter to China.

The World Bank report also mentioned how higher interest rates would draw capital from poorer nations, depriving them of essential domestic investment. Developed economies like the United States and Europe are examples of these.

World Bank President David Malpass stated on a conference call with reporters, “Russia’s invasion of Ukraine has added high new costs.” “The outlook is particularly dire for many of the poorest economies, where access to capital, electricity, fertilizer, and food is likely to be severely restricted for an extended period, and poverty reduction has already come to a grinding halt.”