Highlights
- The World Bank forecasts global economic growth at just 2.4% in 2024.
- High interest rates, inflation, and international tensions contribute to the slowdown.
- This marks the weakest performance in three decades for the global economy.
The global economy is set to experience its most sluggish growth period in 30 years, expanding by only an estimated 2.4% in 2024. This downturn represents a continuous decline from the 2.6% growth in 2023 and the 3% in 2022. A robust 6.2% rebound was seen in 2021 following the pandemic recession of 2020, but this momentum has since waned significantly.
Several factors contribute to this economic deceleration. Persistently high interest rates, designed to curb inflation, have played a significant role. Additionally, slumping trade and a diminished performance from China, a major global economic player, have also impacted growth prospects. The World Bank’s forecast underlines the challenges facing the international economy which has been resilient against numerous shocks in recent years, including the COVID-19 pandemic, Russia’s invasion of Ukraine, and global inflation.
The ongoing conflicts, particularly Israel’s war with Hamas and the Ukraine crisis, are exacerbating tensions and risk further weakening economic growth. Poorer countries face an especially difficult situation, struggling with crippling debt and inadequate resources to address climate change and poverty. The World Bank’s chief economist, Indermit Gill, expressed concern over the impact on developing nations, emphasizing the trap of high debt and limited access to essential resources.
Interestingly, the United States led the growth in 2023, likely achieving a 2.5% increase, surpassing the World Bank’s mid-year predictions. However, this pace is expected to slow down in 2024.