The global economy faces a mounting risk of stagflation—a toxic combination of high inflation and sluggish growth—and many countries could be choked by recession, the World Bank warned in a new report as it slashed over 1 percent from its 2022 economic growth forecast.

The World Bank predicted in its June 7 outlook that the global economy will expand 2.9 percent this year, down 1.2 percentage points from the 4.1 percent pace it forecast for 2022 back in January.

“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” World Bank President David Malpass said in a statement, adding that there’s an “urgent” need to encourage production and not to impose trade restrictions in order to avoid the worst.

Some regions face bigger headwinds than others. America’s economic growth outlook for 2022 was cut by 1.2 percentage points down to 2.5 percent, compared to the January forecast.