The global economy is expected to stabilize for the first time in three years in 2024, but at a low level by recent historical standards, according to the latest World Bank Economic Outlook report, released Tuesday in Washington.
Global growth is expected to remain at 2.6% this year before rising to an average of 2.7% in 2025-2026, according to the same source which specifies that this is well below the average of 3.1%. of the decade preceding the Covid-19 pandemic.
The forecast implies that during the period 2024-26, countries that collectively represent more than 80% of the world’s population and global GDP would still experience slower growth than in the decade before the health crisis, reports the MAP.
Overall, developing economies are expected to grow by 4% on average over 2024-25, somewhat slower than in 2023. Growth in low-income economies is expected to accelerate to 5% in 2024, compared to 3.8% in 2023.
“Four years after the upheaval caused by the pandemic, conflicts, inflation and monetary tightening, it appears that global economic growth is stabilizing,” said Indermit Gill, chief economist and senior vice president of the Global Banking Group. World Bank.
The outlook for the world’s poorest economies is even more worrying. These economies face very high debt service levels, restricted trade opportunities and costly weather events, says the international financial institution.
This year, one in four developing economies are expected to remain poorer than they were on the eve of the pandemic in 2019, the report adds.
Furthermore, the income gap between developing and advanced economies is expected to widen in almost half of developing economies during 2020-24, the highest proportion since the 1990s.
Per capita income in these economies – an important indicator of living standards – is expected to grow by 3% on average through 2026, well below the 3.8% average of the decade before Covid-19.
According to the World Bank, inflation is expected to moderate to 3.5% in 2024 and 2.9% in 2025, but the pace of decline is slower than expected just six months ago. As a result, many central banks are expected to remain cautious in lowering key interest rates.
Global interest rates are likely to remain high by the standards of recent decades, averaging around 4% over 2025-2026, about double the 2000-19 average, it says.
“Even as food and energy prices have moderated across the world, underlying inflation remains relatively high – and could remain so,” said Ayhan Kose, deputy chief economist at the World Bank. and director of the Prospects Group.
The report also notes that the growth of public investment in developing economies has halved since the global financial crisis, falling to an annual average of 5% over the last decade.
