World Bank warns of weakest global economic growth since pandemic

The World Bank has issued a warning about the global economy, stating that it is set to experience its weakest growth since the pandemic. The forecast for 2024 predicts a growth rate of just 2.4%, the lowest since the 2008-2009 financial crisis. The World Bank cited higher interest rates and ongoing conflicts in Ukraine and the Middle East as contributing factors to the sluggish growth. The report identified several challenges, including high levels of debt, limited access to food, and persistently low growth in global trade. In addition, geopolitical risks, such as the Israel-Hamas conflict and attacks on shipping routes, were highlighted as potential sources of inflationary bottlenecks. The World Bank expressed concerns about the impact of higher interest rates in major economies on borrowing costs for poorer countries. It emphasized the discrepancy in recovery between advanced economies and emerging economies, with the latter projected to have significantly lower per capita income by the end of 2024. The report also flagged rising food prices, particularly due to restrictions on rice exports in India. However, it anticipated a 1% decrease in average food prices overall this year. China’s economic slowdown, attributed to declining consumer spending and debt in the property sector, was identified as a headwind for other developed economies. The World Bank’s forecast predicts the slowest half-decade of global economic growth in 30 years. Nevertheless, it emphasized the potential for improvement through increased investment, particularly from the private sector, to address challenges such as climate change and the energy transition.