The World Bank has warned that global economic growth is expected to slow down throughout 2024, capping a poor few years for global economic development.
“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 World Bank said in a press release accompanying the report.
Global economic growth is projected to slow for the third year in a row, falling from 2.6% in 2023 to 2.4% in 2024, almost three-quarters of a percentage point below the average of the 2010s, according to the report.
The poor economic outlook was driven by weak growth in international trade, tight monetary policy and continued conflict in the Middle East, the latter of which has sent shudders through commodity markets.
However, the world is expected to avoid a global economic recession, although geopolitical crises could change this.
Trade growth halved
Global trade growth in 2024 is expected to be only half the average of the decade before the Covid-19 pandemic.
This slow rate of growth is expected to be experienced across rich and poorer nations alike, with China’s economic headwinds expected to be a problem for many developing economies.
China is predicted to grow by 4.5% in the year ahead. Although this is almost double the global average, this is still below the rates of previous years.
‘Wasted opportunity’
“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” said Indermit Gill, the World Bank Group’s chief economist.
To combat this, the UN body called for a “formidable” increase in investment, which it said would help poorer nations experience an investment boom, boost their ability to trade globally and speed up the green energy transition in their countries.
Trade upturn
In spite of the gloomy predictions from the World Bank, there was some possible good news for the global economy in rising Chinese exports.
According to a Reuters poll, in December 2023, China’s exports are predicted to have improved towards the end of last year.
The median forecast of 32 economists predicted that China’s exports are expected to have risen 1.7% in December year-on-year, growing 0.5% in November 2023.
Elsewhere, both South Korea and Germany’s exports saw growth to end the year.
Xu Tianchen, senior economist at the Economist Intelligence Unit, told Reuters that “there's increasing evidence that a cyclical upturn in the global electronics sector is driving a bottoming-out of global trade”.
China’s trade data is expected to be released on Friday (12 January).
