The global economy will come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — the United States, Europe and China — the World Bank warned on Tuesday.

In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth this year by nearly half, to just 1.7%, from its previous projection of 3%. If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.

Though the United States might avoid a recession this year — the World Bank predicts the U.S. economy will eke out growth of 0.5% — global weakness will likely pose another headwind for America’s businesses and consumers, on top of high prices and more expensive borrowing rates. The United States also remains vulnerable to further supply chain disruptions if COVID-19 keeps surging or Russia’s war in Ukraine worsens.

And Europe, long a major exporter to China, will likely suffer from a weaker Chinese economy.

The World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment. At the same time, the report said, those high interest rates will slow growth in developed countries at a time when Russia’s invasion of Ukraine has kept world food prices high.

“Russia’s invasion of Ukraine has added major new costs,” World Bank President David Malpass said on a call with reporters. “The outlook is particularly devastating for many of the poorest economies where poverty reduction is already ground to a halt and access to electricity, fertilizer, food and capital is likely to remain limited for a prolonged period.”

The impact of a global downturn would fall particularly hard on poorer countries in such areas as Saharan Africa, which is home to 60% of the world’s poor. The World Bank predicts per capita income will grow just 1.2% in 2023 and 2024, which is such a tepid pace that poverty rates could rise.

The report follows a similarly gloomy forecast a week earlier from Kristina Georgieva, the head of the International Monetary Fund, the global lending agency. Georgieva estimated on CBS’ “Face the Nation” that one-third of the world will fall into recession this year.

Powell: Fed will not be climate regulator

Federal Reserve Chair Jerome Powell sought to draw a line around how far the central bank will use its powers to promote a greener economy, vowing it will not be a climate regulator.

“The Fed does have narrow, but important, responsibilities regarding climate-related financial risks,” Powell said Tuesday in brief prepared remarks on central bank independence at a forum in Stockholm. “But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals.”

“We are not, and will not be, a ‘climate policymaker.’”

U.S. to pressure for Southwest rebates

The U.S. Department of Transportation and Secretary Pete Buttigieg will require Southwest Airlines to give prompt refunds and reimburse extra expenses after its holiday cancellation meltdown, adding pressure from Washington to speed along a move the carrier is already making to placate customers.

The notice from Washington on Tuesday comes as Dallas-based Southwest Airlines is trying to dissect what actually happened to its crew scheduling systems that prompted more than 16,700 cancellations in late December and figure out how to prevent it from happening again.

Southwest has already promised to reimburse “reasonable” requests for reimbursement for people affected between Dec. 24 and Jan. 2 but said it will take time to process all of the claims.

Goldman Sachs layoffs begin

Goldman Sachs is embarking this week on one of its largest rounds of layoffs since the financial crisis.

Goldman began to lay off employees Tuesday as part of a plan that will see the firm shed up to 3,200 jobs, or roughly 6% of its workforce, two people familiar with the situation said, who were not authorized to share this information publicly. It was planning to notify the bulk of the affected employees Wednesday, the people said.

The layoffs underscore the economic challenges facing the Wall Street giant, which is also trying to regain its footing after a costly push into consumer banking.

— From news services