The World Bank predicts that the global economy will slow for the third consecutive year in 2024.
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The global economy is expected to hit a grim record by the end of 2024: the slowest half-decade of GDP growth in 30 years, according to the World Bank's latest report on the global economic outlook.
According to the report released Tuesday, economic performance in the first half of the 2020s is expected to be even worse than after the financial crisis and other downturns since the early 1990s.
Although global growth is expected to slow for the third year in a row (from 2.6% last year to 2.4% in 2024), the Washington-based organization is confident that the global economy is doing better than a year ago .
It assumes that the prospect of a global recession has decreased, largely due to the strength of the US economy. However, it warns that increasing geopolitical tensions, particularly as a result of Israel's war with Hamas and the conflict in Ukraine, pose the risk of even weaker growth.
“Without a major course correction, the 2020s will go down in history as a decade of missed opportunities,” said World Bank chief economist Indermit Gill.
“Near-term growth will remain weak, leaving many developing countries, particularly the poorest, trapped with crippling debt levels and poor access to food for almost one in three people,” he added.
This would hinder progress on many global priorities, including climate change, he said. However, Gill believes there are still ways to turn the tide.
Slightly stronger growth is expected for the Eurozone in 2024
The World Bank forecasts the 20-nation euro zone will grow 0.7% this year, a slight improvement from last year's 0.4% expansion.
The international financial institution expects economic growth in the United States – the country that led the way with 2.5% growth in 2023 – to slow to 1.6% this year as higher interest rates curb borrowing and spending weaknesses.
China's economy, the world's second-largest, is expected to grow 4.5% this year and 4.3% in 2025, down sharply from 5.2% last year.
The Chinese economy, a leading engine of global growth for decades, has stalled in recent years. The overbuilt real estate market has imploded, consumers are depressed, youth unemployment is rampant and the population is aging, hampering its ability to grow.
A slowdown in growth in China is likely to affect developing countries that supply raw materials to the Chinese market. These include coal-producing South Africa and copper-exporting Chile.
The Japanese economy is expected to grow just 0.9%, half as fast as in 2023.
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