According to the World Bank's latest Global Economic Prospects Report, the global economy by the end of 2024 will record a "grim record", the slowest half-decade GDP growth rate in 30 years.
The report, released on January 9, found that the economic situation in the first half of the 2020s was even worse than the aftermath of the financial crisis and other recessions since the early 1990s.
Specifically, according to CNBC , the World Bank's Global Economic Prospects Report predicts that global economic growth will continue to slow down in 2024. This is also the third consecutive year of economic weakness. The organization forecasts that the world economy will grow by about 2.4% in 2024, down 0.2 percentage points from 2.6% in 2023.
By 2025, global economic growth is expected to pick up slightly by 0.3 percentage points to 2.7%. Overall economic growth over the five-year period will still be 0.75 percentage points lower than the average rate in the 2010s.
While the global economy remains resilient in the face of recession risks in 2023, rising geopolitical tensions pose new short-term challenges. The World Bank said economies will grow more slowly in 2024 and 2025 compared to the previous decade.
“An escalation of geopolitical tensions could have a serious impact on energy prices, which could then have a negative impact on inflation and economic growth,” said Ayhan Kose, deputy chief economist at the World Bank.
“Without a major adjustment, the 2020s will go down as a decade of wasted opportunity,” said World Bank chief economist Indermit Gill.
“Near-term growth will remain weak, leaving many developing countries, especially the poorest, “stuck in a trap” with severe debt levels and poor access to food for nearly a third of the population,” he added.
By the end of this year, people in 25% of developing countries and about 40% of low-income countries will still be poorer than they were before the Covid-19 pandemic, the World Bank said.
Mr. Indermit Gill said that this would hinder progress on many global priorities, including climate change. However, Mr. Gill believes that there is still an opportunity to reverse the situation if governments act quickly to increase investment and strengthen fiscal policy frameworks.
Meanwhile, the euro area is expected to grow more slowly in 2024. The World Bank predicts that the 20-nation euro area will grow 0.7% this year, a modest improvement from the 0.4% growth rate in 2023.
The international financial institution forecasts that economic growth in the US, which led the way in 2023 with 2.5% growth, will slow to 1.6% this year as higher interest rates weaken borrowing and spending.
China, the world's second-largest economy, is forecast to grow 4.5% this year and 4.3% in 2025, down sharply from 5.2% last year.
China’s economy, for decades the world’s top growth engine, has struggled in recent years. An overbuilt property market has ballooned housing stock, depressed consumers, rampant youth unemployment and an aging population have all dented growth.
Slowing growth in China could hurt developing countries that supply commodities to the Chinese market, including South Africa (coal production) and Chile (copper exports).
Japan's economy is expected to grow just 0.9%, half the rate in 2023.
Minh Hoa (t/h according to VTV, Znews)
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