The World Bank’s latest forecast finds that most economies will grow much more slowly in 2024 and 2025 than they did in the decade before COVID-19, implying that progress toward many development goals will be at risk. Fortunately, with the right policies, there is still time to turn the tide.
WASHINGTON, DC – As 2024 begins, the outlook for the global economy seems to be improving. Major economies are emerging mostly unscathed from the fastest rise in interest rates in 40 years, without the usual scars of financial crashes or high unemployment. Countries rarely succeed in taming steep inflation rates without triggering a recession. Yet a “soft landing” is now becoming more likely. Not surprisingly, financial markets are in a celebratory mood.
But caution is in order. The World Bank’s latest Global Economic Prospects indicates that most economies – developed as well as developing – will grow much more slowly in 2024 and 2025 than they did in the decade before COVID-19. Global growth is expected to decelerate for a third year in a row – to 2.4% – before ticking up to 2.7% in 2025. Per capita investment growth in 2023 and 2024 is expected to average just 3.7%, barely half the average of the previous two decades.
The 2020s are shaping up to be an era of wasted opportunity. The end of 2024 will mark the halfway point of what was supposed to be a transformative decade for development – when extreme poverty was to be eliminated, major communicable diseases eradicated, and greenhouse-gas emissions nearly halved. What looms instead is a wretched milestone: the weakest global growth performance of any half-decade since 1990, with average per capita incomes in a quarter of all developing countries set to be lower at the end of 2024 than they were on the eve of COVID-19 pandemic.
WASHINGTON, DC – As 2024 begins, the outlook for the global economy seems to be improving. Major economies are emerging mostly unscathed from the fastest rise in interest rates in 40 years, without the usual scars of financial crashes or high unemployment. Countries rarely succeed in taming steep inflation rates without triggering a recession. Yet a “soft landing” is now becoming more likely. Not surprisingly, financial markets are in a celebratory mood.
But caution is in order. The World Bank’s latest Global Economic Prospects indicates that most economies – developed as well as developing – will grow much more slowly in 2024 and 2025 than they did in the decade before COVID-19. Global growth is expected to decelerate for a third year in a row – to 2.4% – before ticking up to 2.7% in 2025. Per capita investment growth in 2023 and 2024 is expected to average just 3.7%, barely half the average of the previous two decades.
The 2020s are shaping up to be an era of wasted opportunity. The end of 2024 will mark the halfway point of what was supposed to be a transformative decade for development – when extreme poverty was to be eliminated, major communicable diseases eradicated, and greenhouse-gas emissions nearly halved. What looms instead is a wretched milestone: the weakest global growth performance of any half-decade since 1990, with average per capita incomes in a quarter of all developing countries set to be lower at the end of 2024 than they were on the eve of COVID-19 pandemic.