Gloomy global economic outlook outlined in new World Bank report
In its global economic trend report published on Wednesday, the World Bank forecasts just 2.4% global economic growth year on year in 2024, with higher interest rates a major factor.
Global trade and investment would continue to be stifled by conflicts in Ukraine and the Middle East, it said.
Excluding the contraction of the global economy in 2020 due to the impact of the Covid-19 pandemic, the growth rate of 2024 will be the lowest since the 2009 financial crisis.
The World Bank’s forecast of underwhelming growth has been a main focus for three consecutive years. However, the bank is positive that 2025 will see a slightly stronger expansion at 2.7%.
The global economy expanded 2.6% last year, 3% in 2022, and 6.2% in 2021. The big jump in 2021 was due to the impacts of the pandemic beginning to subside.
The World Bank warned that the first half of the 2020s (2020-2024) would see the lowest expansion in 30 years, even lower than during the financial crisis in 2008-2009, the Asian financial crisis of the late 1990s, and the global economic slowdown in the 2000s.
The bank warned that without major adjustments, the 2020s will be “a lost decade” for the global economy. Developing countries will likely experience the biggest impact, with average growth declining more than 1% from that of the previous decade.
The World Bank also predicted that by the end of this year, about a quarter of the population in developing countries, and 40% in low-income countries would suffer from higher levels of poverty than before the pandemic.
