Global growth stabilizing at 2.6% in 2024, still below pre-pandemic levels: World Bank
The World Bank's latest Global Economic Prospects report forecasts that the global economy will stabilize in 2024, achieving a growth rate of 2.6%, consistent with 2023. This rate is a slight improvement from the World Bank's January projection of 2.4%, primarily due to strong U.S. demand. Despite this stabilization, the global growth rate remains below the 3.1% average seen in the decade before the COVID-19 pandemic. The report anticipates a modest rise to 2.7% in 2025-26, driven by increases in trade and investment.
The report indicates that over 80% of the world's population and GDP will experience slower growth compared to the pre-pandemic decade. Developing economies are expected to grow at an average of 4% over 2024-25, a slight decline from 2023, while low-income economies are projected to see an acceleration to 5% growth in 2024. However, three out of every four low-income economies have seen their 2024 growth forecasts downgraded since January. The report also highlights ongoing fiscal challenges, with public investment identified as a key policy lever to boost growth.
The World Bank also warns of several downside risks to the global economic outlook. These include potential geopolitical conflicts, disruptions to shipping and inflation, and market instability for commodities like oil and grains. Additionally, interest rates are expected to remain double their 2000-2019 average over the next three years, which could exacerbate debt pressures in emerging market countries that have borrowed in dollars.
