Signs of global growth stablization for the first time after three years

The World Bank's latest Global Economic Prospects report forecasts global economic stabilization with a modest growth rate of 2.6% in 2024, slightly increasing to 2.7% in 2025-26. This growth rate is notably lower than the pre-COVID decade average of 3.1%, meaning over 80% of the world's population and GDP will experience slower growth compared to the pre-pandemic period. Developing economies are projected to grow at an average of 4% in 2024-25, with low-income economies seeing an increase to 5% in 2024. Despite these figures, many low-income countries face significant challenges such as high debt service costs, restricted trade opportunities, and costly climate events, underscoring the need for international support to stimulate private investment and improve infrastructure.

Growth disparities between advanced and developing economies are expected to widen, with one in four developing economies remaining poorer than they were in 2019. The income gap between these economies is set to expand in nearly half of developing countries by 2024, marking the highest disparity since the 1990s. Per capita income growth in developing economies is forecasted to average 3.0% through 2026, down from 3.8% in the pre-COVID decade. Global inflation is predicted to decrease to 3.5% in 2024 and 2.9% in 2025, but central banks may delay interest rate cuts due to persistent core inflation, leading to tighter financial conditions and slower growth in developing economies.

The regional outlooks highlight varied economic prospects. East Asia and Pacific growth is expected to decelerate to 4.8% in 2024 and 4.2% in 2025. Europe and Central Asia's growth will edge down to 3.0% in 2024 and moderate to 2.9% in 2025. Latin America and the Caribbean will see a decline to 1.8% in 2024 before picking up to 2.7% in 2025. The Middle East and North Africa region is projected to grow by 2.8% in 2024 and 4.2% in 2025. South Asia is expected to maintain a growth rate of 6.2% in both 2024 and 2025. Sub-Saharan Africa's growth is anticipated to increase to 3.5% in 2024 and 3.9% in 2025. These outlooks emphasize the need for tailored economic policies to address region-specific challenges and opportunities.