The global economy is expected to stabilise for the first time in three years in 2024 — but at a level that is weak by recent historical standards, according to the World Bank’s latest Global Economic Prospects report.
Global growth is projected to hold steady at 2.6% in 2024 before edging up to an average of 2.7% in 2025-26. That is well below the 3.1% average in the decade before COVID-19. The forecast implies that over the course of 2024-26 countries that collectively account for more than 80% of the world’s population and global GDP would still be growing more slowly than they did in the decade before Covid-19.
Overall, developing economies are projected to grow 4% on average over 2024-25, slightly slower than in 2023. Growth in low-income economies is expected to accelerate to 5% in 2024 from 3.8% in 2023. However, the forecasts for 2024 growth reflect downgrades in three out of every four low-income economies since January. In advanced economies, growth is set to remain steady at 1.5% in 2024 before rising to 1.7% in 2025.
the World Bank Group’s Chief Economist and Senior Vice President Indermit Gill said,
“Four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying.
“However, growth is at lower levels than before 2020. Prospects for the world’s poorest economies are even more worrisome. They face punishing levels of debt service, constricting trade possibilities, and costly climate events. Developing economies will have to find ways to encourage private investment, reduce public debt, and improve education, health, and basic infrastructure. The poorest among them — especially the 75 countries eligible for concessional assistance from the International Development Association — will not be able to do this without international support,” he said.
This year, one in four developing economies is expected to remain poorer than it was on the eve of the pandemic in 2019.
This proportion is twice as high for countries in fragile- and conflict-affected situations. Moreover, the income gap between developing economies and advanced economies is set to widen in nearly half of developing economies over 2020-24 — the highest share since the 1990s. Per capita income in these economies — an important indicator of living standards—is expected to grow by 3.0% on average through 2026, well below the average of 3.8% in the decade before Covid-19.
The latest Global Economic Prospects report also features two analytical chapters of topical importance. The first outlines how public investment can be used to accelerate private investment and promote economic growth.
