World Bank predicts the worst half of global economic growth in 30 years
Kyiv • UNN
The World Bank forecasts a decline in global growth in 2024. The lowest growth rates are expected in developing countries.
According to the World Bank, the global economy is on track for the worst six months of growth in 30 years. This was reported by UNN with reference to CNBC.
Details
The World Bank's latest Global Economic Prospects report predicts that global growth will slow for the third consecutive year. In 2024, it will decline to 2.4% from 2.6% in 2023.
In 2025, growth is expected to increase to 2.7%, although the acceleration over the five-year period will remain almost three-quarters of a percentage point below the average of the 2010s.
Risks
It is noted that although the global economy proved to be resilient in the face of recessionary risks in 2023, increased geopolitical tensions will create new short-term challenges. As a result, most economies will grow more slowly in 2024 and 2025 than in the previous decade.
War in Eastern Europe - Russia's invasion of Ukraine, and a major conflict in the Middle East could have significant implications for energy prices, which could affect inflation as well as economic growth
- Aihan Kose, Deputy Chief Economist of the World Bank and Director of the Perspectives Group, told CNBC.
The bank warned that without a "serious course correction" the 2020s would be a "decade of lost opportunities.
Regions
However, in the medium term, developing countries will suffer the most, as sluggish global trade and tight financial conditions weigh heavily on growth.
In 2024, the economies of developing countries are expected to grow by only 3.9%, more than one percentage point below the average of the previous decade. By the end of the year, people in about one in four developing countries and about 40% of low-income countries will still be poorer than they were on the eve of the Covid-19 pandemic in 2019, the organization noted.
The Bank's analysts believe that the world is falling short of its goal of making the 2020s a "transformative decade" in the fight against extreme poverty, major infectious diseases, and climate change. However, he added that there is an opportunity to turn the tide if governments act quickly by increasing investment and strengthening fiscal policy frameworks.
By region, growth will weaken most this year in North America, Europe and Central Asia, and Asia Pacific, mainly due to a slowdown in China. A slight improvement is forecast in Latin America and the Caribbean, while more significant growth is expected in the Middle East and Africa.
