World Bank warns global growth will continue to slow in 2024

The World Bank forecasts that world GDP this year could grow by 2.4%, marking the third consecutive year of slowing global growth.

The latest World Bank report has just forecast that global GDP could increase by 2.4% in 2024. This growth rate would be the worst result since the 2009 financial crisis, excluding the pandemic-induced decline in 2020.

The US is forecast to grow 1.6% this year, after reaching 2.5% in 2023. The world's largest economy is slowing as tight monetary policy continues to take hold, while household savings decline.

The eurozone is more subdued, with growth forecast at 0.7% this year, after high energy prices led to growth of just 0.4% in 2023. Tighter credit conditions mean the region’s outlook is worse than the World Bank forecast in mid-last year.

China’s growth could also slow to 4.5% in 2024, marking its slowest pace in more than three decades, excluding the years affected by Covid-19. The world’s second-largest economy faces weak consumer spending and continued property uncertainty, while longer-term issues such as an aging population and rising debt limit investment.

Emerging markets and developing economies are forecast to grow 3.9% in 2024, down from 4% in 2023. The World Bank said the way to boost growth, especially in emerging markets and developing countries, is to accelerate annual investments of about $2.4 trillion to transition to clean energy and adapt to climate change.

Workers work at the Nio electric vehicle factory in Hefei, Anhui, China in late August 2022. Photo: Reuters

Indermit Gill, chief economist of the World Bank, said global growth would remain weak in the short term, leaving many developing countries – especially the poorest – trapped in a debt trap. By the end of 2024, people in about 25% of developing countries and 40% of low-income countries are expected to be poorer than they were in 2019, before the pandemic.

Global growth is expected to improve to 2.7% in 2025, down from the 3% forecast in June 2023, due to a slowdown in advanced economies.

Overall, the World Bank said the 2030 target of ending extreme poverty is largely out of reach, as economic activity is hampered by geopolitical conflicts.

“Without a major adjustment, the 2020s will be remembered as a decade of wasted opportunity,” commented Indermit Gill.

Phien An ( according to Reuters )

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