DKosig
Global economic growth, constrained by tight monetary policies, is expected to decelerate again in 2024, capping a five-year period that’s projected to be the weakest start to a decade since the 1990s, the World Bank said on Tuesday.
World real GDP is projected to slow to 2.4% in 2024 from 2.6% in 2023, which was a deceleration from 3.0% in 2022. Global growth is expected to pick up to 2.7% in 2025, according to the World Bank’s “Global Economic Prospects” report.
“Global growth is set to slow further this year, amid the lagged and ongoing effects of tight monetary policy, restrictive financial conditions, and feeble global trade and investment,” said the report’s authors.
While the projected 2024 growth rate is unchanged from the bank’s June 2023 projections, the growth rates of different regions have been revised.
“Near-term prospects are diverging, with subdued growth in major economies alongside improving conditions in emerging market and developing economies with solid fundamentals,” they said. However, the outlook for EMDEs with significant vulnerabilities remains precarious as they struggle with elevated debt and financing costs.
Real GDP in the U.S. was revised up 0.8 percentage point to 1.6% in 2024 from 2.5% in 2023, while Euro area growth was marked down 0.6 pp to 0.7%, improving from the 0.4% growth estimated for 2023.
East Asia and Pacific real GDP growth is projected to rise 4.5%, 0.1 pp lower than the June 2023 projection, slowing from the 5.1% estimated for 2023. Growth in China at 4.5%, also down 0.1 pp from the previous report, is seen slowing from 5.2% in 2023.
South Asia real GDP is expected to climb 5.6% this year, reflecting an upward revision of 0.5 pp, and easing slightly from the 5.7% expected for 2023.
Real GDP in Latin America and the Caribbean is projected to increase 2.3% in 2024, up 0.3 pp from the prior outlook and increasing from 2.2% in 2023, the report said.
Middle East and North Africa real GDP is projected to grow 3.5% in 2024, up from 1.9% in 2023 and a 0.5 pp revision from the prior projection. The most dramatic growth is expected to occur in Saudi Arabia, with 4.1% growth this year, a 0.8 pp upward revision, and snapping back from a 0.5% decline in 2023.
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