Washington, The World Bank (WB) on Tuesday expected that the world will avoid a third consecutive decline in real GDP growth since a big jump after the Corona pandemic in 2021, with the growth rate in 2024 stabilizing at 2.6 percent, unchanged from 2023.
The WB stated in its latest World Economic Outlook report that the stronger-than-expected performance of the US economy prompted it to raise its global growth expectations during the current year, but it warned that output would remain much lower than pre-pandemic levels until 2026.
The new forecast is about 0.2 percent higher than the bank’s estimate last January, largely due to strong demand in the United States.
The WB expected global economic growth to reach 2.7 percent over the next two years, which is much lower than the average of 3.1 percent in the decade before the (Covid-19) pandemic.
It is also expected that interest rates in the next three years will remain at double the average in the period from 2000 to 2019, which will curb growth and incre
ase debt pressures on emerging market countries borrowing in dollars.
The report explained that the economies of countries that represent 80 percent of the worlds population and their gross product will grow at a slower pace than before the pandemic until 2026.
The report includes a parallel scenario that takes into account a “higher for longer” interest rate scenario. In this scenario, continued inflation in advanced economies keeps interest rates about 40 basis points higher than the World Banks baseline expectations, which will lead to a decline in global growth in 2025 to 2.4 percent.
The World Bank currently expects the United States economy to grow by about 2.5 percent this year, which is the same pace as last year, but much higher than the January forecast of 1.6 percent.
The WB raised its forecast for Chinese economic growth this year to 4.8 percent from 4.5 percent in January, largely due to increased exports that offset weak domestic demand.
The WB expects Chinese economic growth to decline to
4.1 percent next year amid weak investment, consumer confidence, and a continued slowdown in the real estate sector.
The WB revised its growth forecast for the Indian economy this year to 6.6 percent from 6.4 percent in January, thanks to strong domestic demand.
It lowered its forecast for Japan’s economic growth to 0.7 percent from 0.9 percent due to weak demand growth, a slowdown in exports, and stable demand for tourism.
The WB kept its forecast for the eurozone unchanged at 0.7 percent, with the continued difficulties facing the bloc amid rising energy costs and weak industrial output.
Source: Qatar News Agency
