The World Bank has updated its global growth forecasts, projecting a 2.6% expansion for the world economy in 2024, followed by 2.7% in 2025 and 2026. This outlook is bolstered by the strength of the US economy, which is anticipated to grow by 2.5% this year. Chief Economist Indermit Gill highlighted that after four tumultuous years marked by the pandemic, conflicts, inflation, and monetary tightening, the global economy is showing signs of stabilization, although growth rates remain below the pre-pandemic average of 3.1%.Developing countries are expected to experience a slower growth rate of 4.0% in 2024, with advanced economies growing at 1.5%. The report raises concerns for the poorest economies, which are grappling with high debt levels, trade restrictions, and the costs of climate-related events. Deputy Chief Economist Ayhan Kose warned that core inflation is likely to stay relatively high, which could delay interest rate cuts by central banks in developed countries, potentially leading to tighter global financial conditions and weaker growth in developing countries.Specific regional forecasts include a 2.6% growth for Chile in 2024, driven by strong external demand for green energy products, while Guyana is expected to outperform with a 34.3% growth. In contrast, Argentina is projected to face a contraction of 3.5% due to economic adjustment policies. The World Bank also retains India’s growth forecast at 6.6% for FY25, attributing it to robust domestic demand and investment.
Key points
- World Bank revises global economic growth to 2.
- Developing economies to grow by 4.
- High interest rates could hinder growth, particularly in developing countries.
- Regional disparities evident, with Guyana booming and Argentina contracting.
6% for 2024, with US leading the way at 2.
5%.
0%, but face challenges from high debt and climate events.
