China, the world’s second-largest economy after the United States, is struggling with the collapse of its real estate market and with weak consumer confidence. The Chinese economy is expected to decelerate to 4.8% this year from 5.2% in 2023.
The World Bank has revised its global economic growth forecast for 2024, saying that the world economy will expand 2.6% this year, up from the 2.4% it predicted in January. This updated outlook will match the 2.6% growth recorded in 2023, driven largely by sustained economic performance in the United States.
Despite the improved forecast, the World Bank cautions that global growth remains sluggish compared to historical standards. The world’s poorest countries are particularly burdened by heavy debts and high interest rates. Also, rising trade barriers pose significant threats to global prosperity. The ongoing conflicts in Ukraine and Gaza are further inflicting further pressures on regional economies.
“Growth is at lower levels than before 2020,” World Bank group chief economist Indermit Gill said in a statement, adding that the prospects for the world’s poorest economies “are even more worrisome.” “They face punishing levels of debt service, constricting trade possibilities, and costly climate events,” Gill said, adding that they would need to find ways to bring in new private investment and reduce public debt.
The bank now expects emerging market and developing economies to grow by 4.0 percent this year, slightly above the January forecast but also below pre-pandemic levels. The World Bank upgraded its 2024 growth forecast for the world’s advanced economies to 1.5 percent – up 0.3 percentage points – due almost entirely to a sharp rise in its projected outlook for the United States.
It now expects the US economy to grow by 2.5 percent this year, up 0.9 percentage points from January, fueled largely by “robust” consumption and government spending, as well as a reduction in imports. The upgrade to the US outlook is responsible for 80 percent of the increase to the global growth outlook for 2024, World Bank deputy chief economist Ayhan Kose told reporters ahead of the report’s publication.
China, the world’s second-largest economy after the United States, is struggling with the collapse of its real estate market and with weak consumer confidence. The Chinese economy is expected to decelerate to 4.8% this year from 5.2% in 2023.
Growth in Latin America is forecast to slow from 2.2% last year to 1.8% in 2024. The World Bank expects the economy of sub-Saharan Africa to grow 3.5%, modest but up from 3% last year. The 20 European countries that share the euro currency, hurt by the consequences of Russia’s war against Ukraine, are expected to eke out 0.7% growth in 2024, though that would be nearly twice their 0.4% growth in 2023.
The World Bank expects Japan’s economic growth, hobbled by sluggish consumer spending and flagging exports, to slow to 0.7% this year from 1.9% in 2023.
Countries around the world last year imposed a record number of measures to restrict trade, partly a consequence of geopolitical tensions, especially between the United States and China. Measured by volume, world trade barely grew last year — 0.1% — and is forecast to expand by a still-meager 2.5% in 2024. The World Bank says it worries that faltering trade will hold back global growth.
With inputs from agencies.
Find us on YouTube
