Economic growth across the world is forecast to slow for the third year in a row in 2024
© Getty Images/Richard Baker
The global economy is on track for its worst five-year period of growth in at least three decades, the World Bank warned in its latest ‘Global Economic Prospects’ report released on Tuesday.
This year, global growth is expected to decline for a third year in a row, making the economic performance in the period between 2020 and 2024 worse than during the years surrounding the 2008-2009 global financial crisis, the Asian financial crisis of the late 1990s, and the downturns in the early 2000s, World Bank Deputy Chief Economist Ayhan Kose told reporters.
According to the organization, growth in the world economy is set to drop to 2.4% in 2024, from the 2.6% recorded last year amid increased geopolitical tensions and an anticipated slowdowns in advanced economies.
Escalation of the Ukraine and Israel-Hamas conflicts “could have significant implications for energy prices that could have impacts on inflation, as well as on economic growth,” Kose told CNBC.
The report warned that most world economies are set to grow at a weaker pace in 2024 and 2025 than in the previous decade, adding that without a “major course correction,” the 2020s will go down as “a decade of wasted opportunity.”
According to the organization, developing economies are expected to be the hardest hit on a medium-term basis as sluggish global trade and tight financial conditions weigh heavily on growth.
“Near-term growth will remain weak, leaving many developing countries — especially the poorest — stuck in a trap: with paralyzing levels of debt and tenuous access to food for nearly one out of every three people,” World Bank Group Chief Economist Indermit Gill said in a statement.
The US economy, which saw 2.5% growth last year, is forecast to expand by a mere 1.6% in 2024 as restrictive monetary policy dampens business activity amid shrinking savings, the development bank said.
Meanwhile, the Eurozone’s outlook for this year is considerably bleaker, with growth expected at just 0.7% after the ramifications of the energy crisis resulted in 0.4% growth in 2023.
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