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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

World Bank Expects Global Growth to Stabilize at 2.6% in 2024


Tue 11 Jun 2024 | 08:14 PM
Taarek Refaat

In its latest edition of the “Global Economic Prospects” report, the World Bank expected that the global economy would achieve stable growth rates for the first time in three years in 2024, but at weak levels by historical standards.

The bank also expected global growth to remain stable at 2.6% in 2024 before rising to 2.7% on average in the period 2025-2026, which is much lower than the average of 3.1% in the decade before the outbreak of the Corona pandemic.

These projections suggest that over the period 2024-2026, countries that together account for more than 80% of the world's population and global GDP will continue to grow at a slower pace than in the decade before the pandemic.

Overall, developing economies are expected to grow by 4% on average during 2024-2025, slightly slower than in 2023.

Growth in low-income economies is expected to accelerate to 5% in 2024, up from 3.8% in 2023.

However, growth forecasts for 2024 reflect a downward revision in expectations in three out of four low-income economies since January. As for advanced economies, the growth rate is expected to remain stable at 1.5% in 2024 before rising to 1.7% in 2025.

This year, one in four developing economies is expected to remain poorer than before the pandemic struck in 2019. This proportion is twice as high for countries in fragile and conflict-affected situations.

The income gap between developing economies and advanced economies is expected to widen in about half of developing economies during the period 2020-2024, which is the highest rate since the 1990s. Per capita income in these economies - an important indicator of living standards - is expected to grow by 3. % on average until 2026, which is much lower than the average of 3.8% in the ten years before the pandemic.

The global inflation rate is expected to decline to 3.5% in 2024 and to 2.9% in 2025, but at a slower rate of decline than expected just six months ago. As a result, it is expected that many central banks will remain cautious in lowering key interest rates.

Global interest rates are likely to remain high by the standards of recent decades – averaging about 4% over the period 2025-2026, almost double the average of 2000-2019.