World Bank Sees ‘Wretched’ Run For Post-Pandemic Global Growth

(Bloomberg) -- The global economy is dragging along at growth rates slower than previous decades, the World Bank said, as the post-pandemic rebound is weighed down by high interest rates, sluggish trade and geopolitical tensions that will hit developing countries hardest.

In the five years through 2024, global activity will post the weakest performance since the early 1990s, a “wretched milestone” that will leave one out of four developing economies poorer than before the Covid-19 pandemic, the Washington-based lender said Tuesday in its latest Global Economic Prospects report. 

“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” Indermit Gill, the bank’s chief economist, said in a statement. Such weak near-term growth will leave many of the poorest countries “with paralyzing levels of debt and tenuous access to food for nearly one out of every three people.”

Per-capita investment growth in developing economies over 2023-2024 will average 3.7%, about half the average of the previous 20 years, without policies designed to boost investments and strengthen fiscal policies. 

More Details: Table of World Bank Global Outlook and Forecasts

The World Bank sees global growth slowing in 2024 for a third year in a row to 2.4% — down from 2.6% last year and unchanged from its June forecast — before rising to 2.7% in 2025, revised down 0.3 percentage points. Those rates compare with an average of 3.1% during the 2010s.

Global growth for 2020-2024 is expected to hit 2.2%, the slowest for a five-year period since 2.1% in 1990-1994, according to the World Bank’s estimates.

Other key points include:

• Global trade in goods and services will rise 2.3% this year, compared with 0.2% in 2023, the slowest pace outside of recessions for the past 50 years. While rebounding, the 2024 figure is revised down 0.5 percentage points from June due to weaker-than-expected growth in China and investments.
• Global inflation will slow to 3.7% this year and 3.4% in 2025, still above the pre-pandemic average from 2015-19 but closer to central bank inflation targets.
• The US economy will slow from 2.5% last year to 1.6% this year, with both estimates revised up 1.4 ppt and 0.8 ppt, respectively
• China will slow from 5.2% last year to 4.5% this year, both revised down 0.4 ppt and 0.1 ppt, respectively

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.