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The global economy is on track for its poorest five-year period of growth in at least three decades, according to the World Bank’s newest ‘Global Economic Prospects’ study, which was issued Tuesday.
Global growth is expected to fall for the third year in a row this year, making economic performance between 2020 and 2024 worse than it was during the 2008-2009 global financial crisis, the Asian financial crisis of the late 1990s, and the downturns in the early 2000s, according to World Bank Deputy Chief Economist Ayhan Kose.
According to the organisation, growth in the global economy is forecast to fall to 2.4% in 2024, from 2.6% last year, amid heightened geopolitical tensions and an expected downturn in advanced economies.
Escalation of the Ukraine and Israel-Hamas conflicts “could have significant implications for energy prices that could have impacts on inflation, as well as on economic growth,” Kose told CNBC.
The report warned that most world economies are set to grow at a weaker pace in 2024 and 2025 than in the previous decade, adding that without a “major course correction,” the 2020s will go down as “a decade of wasted opportunity.”
According to the organisation, developing nations would be the hardest hurt in the medium term as sluggish global commerce and restrictive financial conditions stifle growth.
“Near-term growth will remain weak, trapping many developing countries, particularly the poorest, in a cycle of crippling debt and tenuous access to food for nearly one in every three people,” World Bank Group Chief Economist Indermit Gill said in a statement.
The US economy, which expanded by 2.5% last year, is expected to grow by only 1.6% in 2024 as restrictive monetary policy dampens economic activity and shrinks savings, according to the development bank.
