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Monday, July 15, 2024

World Bank Anticipates Global Economic Stability in 2024

The latest Global Economic Prospects report from the World Bank indicates a projected stabilization of global economic growth in 2024, marking the first time in three years. However, growth rates remain subdued compared to pre-pandemic levels, with global growth forecasted to remain at 2.6% in 2024 and to marginally increase to an average of 2.7% in 2025-26.

This is notably lower than the 3.1% average experienced in the decade before COVID-19. The report emphasizes that over 80% of the global population and GDP will experience slower growth compared to the pre-pandemic decade. Developing economies are expected to grow by an average of 4% over 2024-25, slightly lower than in 2023. Low-income economies are forecasted to experience an acceleration in growth to 5% in 2024, up from 3.8% in 2023, although growth forecasts for 2024 have been revised downward for three out of every four low-income economies since January. Advanced economies are projected to maintain a steady growth rate of 1.5% in 2024, rising to 1.7% in 2025.

There are, of course, notable bright spots in the global economy. The U.S. economy, in particular, has shown impressive resilience. Growth has remained buoyant in the teeth of the fiercest monetary policy tightening in four decades. U.S. dynamism, in fact, is one reason the global economy enjoys some upside potential over the next two years.

India and Indonesia are two additional examples of robust performance. India’s economy has been buoyed by strong domestic demand, with a surge in investment, and robust services activity. It is projected to grow an average of 6.7 percent per fiscal year from 2024 through 2026—making South Asia the world’s fastest-growing region.

Indonesia is expected to benefit from a growing middle class and generally prudent economic policies, expanding by an average of 5.1 percent over the next two years.

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