The latest World Bank Global Economic Prospects report says the global economy is expected to stabilise for the first time in three years in 2024—but at a level that is weak by recent historical standards.
The report, released by the Bretton Woods institution on Tuesday, says global growth is projected to hold steady at 2.6 percent in 2024 before edging up to an average of 2.7 percent in 2025-26.
In a statement, the bank says the projected growth is well below the 3.1 percent average in the decade before Covid-19.
According to the bank, the forecast implies that over the course of 2024-26 countries that collectively account for more than 80 percent of the world’s population and global GDP would still be growing more slowly than they did in the decade before Covid-19.
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World Bank Group’s Chief Economist and Senior Vice President Indermit Gill says four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying.
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“However, growth is at lower levels than before 2020. Prospects for the world’s poorest economies are even more worrisome. They face punishing levels of debt service, constricting trade possibilities, and costly climate events.
“Developing economies will have to find ways to encourage private investment, reduce public debt, and improve education, health, and basic infrastructure. The poorest among them— especially the 75 countries eligible for concessional assistance from the International Development Association—will not be able to do this without international support,” Gill said.
World Bank Deputy Chief Economist and Director of the Prospects Group Ayhan Kose said although food and energy prices have moderated across the world, core inflation remains relatively high—and could stay that way.
“That could prompt central banks in major advanced economies to delay interest-rate cuts. An environment of ‘higher-for-longer’ rates would mean tighter global financial conditions and much weaker growth in developing economies,” Kose said.
