Global economy set for its worst half decade of growth in 30 years: World Bank

The global economy is on course to record its worst half decade of growth in 30 years, according to the World Bank.

Global growth is forecast to slow for the third year in a row in 2024, dipping to 2.4% from 2.6% in 2023, the organization said in its latest “Global Economic Prospects” report released Tuesday.

Growth is then expected to rise marginally to 2.7% in 2025, though acceleration over the five-year period will remain almost three-quarters of a percentage point below the average rate of the 2010s.

And despite the global economy proving resilient in the face of recessionary risks in 2023, increased geopolitical tensions will present fresh near-term challenges, the organization said, leaving most economies set to grow more slowly in 2024 and 2025 than they did in the previous decade.

“You have a war in Eastern Europe, the Russian invasion of Ukraine. You have a serious conflict in the Middle East. Escalation of these conflicts could have significant implications for energy prices that could have impacts on inflation as well as on economic growth,” Ayhan Kose, the World Bank’s deputy chief economist and director of the Prospects Group, told CNBC’s Silvia Amaro.

The bank warned that without a “major course correction,” the 2020s will go down as “a decade of wasted opportunity.”

On a regional basis, growth this year is set to weaken most in North America, Europe and Central Asia, and Asia Pacific — mainly on account of slower growth in China. A slight improvement is forecast for Latin America and the Caribbean, coming off a low base, while more marked pickups are expected in the Middle East and Africa.

Still, developing economies are set to be the hardest hit on a medium-term basis as sluggish global trade and tight financial conditions weigh heavily on growth.

“Near-term growth will remain weak, leaving many developing countries —…