The World Bank predicted on Tuesday that the global economy will slow for a third straight year in 2024.
Struggling with high global interest rates, inflation and a struggling Chinese economy, the World Bank forecasts the global economy will grow by just 2.4 percent this year. That would be down from 2.6 percent growth in 2023, 3 percent in 2022 and 6.2 percent in 2021, though that year was bolstered by COVID pandemic recovery.
The World Bank projected slower growth for the U.S. as well, reducing from 2.5 percent in 2023 to 1.6 percent in 2024.
“Near-term growth will remain weak, leaving many developing countries — especially the poorest — stuck in a trap: with paralyzing levels of debt and tenuous access to food for nearly one out of every three people,” World Bank chief economist Indermit Gill said in a statement.
Citing rising global tensions, especially with the ongoing Russia-Ukraine war and the Israel-Hamas war in Gaza, the World Bank predicted slow growth and instability.
“As the world nears the midpoint of what was intended to be a transformative decade for development, the global economy is set to rack up a sorry record by the end of 2024 — the slowest half-decade of GDP growth in 30 years,” the organization said in a statement.
While the U.S. economy remains strong and inflation domestically continues to slow, many global economies are in a weaker position. Slowing global trade is projected to hamper growth in much of the world.
That also translates to developing countries, where high interest rates make borrowing funds difficult, therefore slowing investment and growth, the World Bank said. Developing countries are projected to grow by just 3.9 percent, a full percentage point below the 2010s decade average.
“By the end of 2024, people in about one out of every four developing countries and about 40% of low-income countries will still be poorer than they were on the eve of the COVID pandemic in 2019,” the World Bank said.
“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” Gill continued.
There is good news, however, with the U.S. economy lifting up poor performance from other nations. Effective Federal Reserve inflation management has driven down the domestic inflation rate to near its 2 percent target, and the global inflation rate is projected to fall from 2023’s 5.9 percent to 3.7 percent in 2024 and 3.4 percent in 2025.
U.S. inflation fell to 3.1 percent last month, according to Labor Department data, down from 6.4 percent last January.