World Bank Predicts A Sluggish Five Years Ahead
Estimated reading time: 3 minutes
Global Growth on Shaky Ground
The U.S. stock market may be flirting with all-time highs, but a recent assessment from the World Bank paints a gloomier picture.
The international financial institution forecasts the worst half-decade growth in 30 years for the global economy, citing growing geopolitical strife and its potential impact on energy prices and inflation.
The Global Outlook
The worldwide economy is on course for 2.4% growth this year, a decline from 2.6% in 2023, according to the World Bank’s estimates. A slight uptick is expected in 2025. But looking at the five year horizon, global growth is predicted to stay about 0.75% below the average of the previous decade.
For the two largest economies, the U.S. and China, the story is similar. What’s considered “normal” or “strong” for the two nations, is still different, with China expected to have a high growth rate. But the Chinese economy is expected to expand just 4.5% this year, down from 5.2% in 2023. Meanwhile, the U.S. economy is predicted to decelerate to 1.6% in 2024.
Developing Nations Under Pressure
Mature economies anecdotally grow at a slower rate compared with developing economies. But in 2024, developing nations are expected to grow by only 3.9%, a rate more than 1% below the average of the past decade. This is primarily due to high debt levels, uncertain access to food, and the overall sluggish outlook for global trade.
By the end of the year, this trajectory would leave the populations of approximately a quarter of developing countries, as well as nearly 40% of low-income nations, poorer than before the pandemic, according to the World Bank
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