Global economy on track for worst half-decade of growth in 30 years, says World Bank

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The global economy is on track for its worst half-decade of growth in 30 years, the World Bank has warned in its latest projections for 2024, as higher borrowing costs and geopolitical tensions weigh on output.

In forecasts published on Tuesday, the multilateral organisation said gross domestic product in the world economy was set to expand just 2.4 per cent in 2024 — down from 2.6 per cent last year. If the predictions are accurate, it would mark the third year in a row where growth would prove weaker than the previous 12 months.

“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” said Indermit Gill, the World Bank’s chief economist and senior vice-president.

The lender said global trade growth in 2024 was expected to be only half the average in the decade before the pandemic. 

The slowdown in world trade and rise in borrowing costs meant average annual growth for developing countries since 2020 was just 3.9 per cent a year — a full percentage point lower than during the previous decade, it added.

The first years of the decade have been marked by the start of the coronavirus pandemic, the ratcheting up of geopolitical tensions following Russia’s invasion of Ukraine, and the biggest surge in global inflation in a generation. The Israel-Hamas war has raised concerns over a broader conflict in the Middle East.

The warning comes at a time when other multinational organisations are voicing concerns over medium-term prospects for a world economy weighed down by tighter credit conditions and heightened conflict-related risks.

The IMF’s projections for the next five years are at their lowest level since the rise of globalisation in the 1990s. Fund officials have repeatedly warned governments against loosening trade ties, which the fund claims will weaken growth and feed into inflation….