The World Bank raises global growth to 2.6% in 2024 and maintains that of 2025 at 2.7%

He growth of the global economy will stabilize this year in the 2.6%, two tenths above forecast last January, according to the projections of the world Bankwhich anticipates an expansion of 2.7% for each of the next two yearsaccording to the latest edition of the ‘World Economic Prospects’ report.

The ‘twin’ organization of

International Monetary Fund (IMF), highlights that, in 2024, the growth of The world economy “will stabilize for the first time in the last three years”although it recognizes that it will do so at a weak level compared to recent historical parameters.

In addition, The 2.7% expansion rate forecast for 2025 and 2026 is much lower than the 3.1% average of the decade before Covid-19 and warns that the forecast implies that, in the forecast horizon, the countries that together represent more than 80% of the world population and global GDP will continue to grow at a slower rate than during the decade before the pandemic.

In general, Developing economies are expected to grow by an average of 4% during the period 2024-25, slightly less than in 2023, while growth in low-income economies is expected to accelerate to 5% in 2024, compared to 3.8% in 2023. Of its side, In advanced economies, growth will remain stable at 1.5% through 2024, before rising to 1.7% in 2025.

“Four years after the shocks caused by the pandemic, conflict, inflation and monetary tightening, it would appear that global economic growth may be stabilizing,” said Indermit Gill, chief economist and senior vice president at the World Bank.

Among the most developed economies, the new World Bank forecasts include a substantial upward revision to expected US growth in 2024up to 2.5% this year, nine tenths more than anticipated in January, while for the following two years it foresees an expansion of 1.8% annually, one tenth more than previously anticipated for next year.

On the contrary, in the case of the

Euro zonethe institution now expects that GDP growth in 2024 will be 0.7%in line with what was forecast in January, after the 0.5% expansion in 2023, while it cuts two tenths of the expected for 2025, to 1.4%, and for 2026 it projects an expansion of 1.3%.

Among major emerging and developing economies, the World Bank expects China moderate its expansion in 2024 to 4.8% from 5.2% in 2023, which implies an improvement of three tenths compared to the previous forecast, while that of 2025 worsens two tenths, to 4.1% and by 2026 confident in 4% growth.

As to Russia, the new projections anticipate GDP growth of 2.9% for this year, compared to 3.6% in 2023, which represents an improvement of 1.6 points compared to the January forecasts. Looking ahead to 2025, the institution expects an expansion of 1.4%, half a percentage point more, and for 2026, 1.1%.

“The outlook for the world’s poorest economies is even more worrying“warns Indermit Gill regarding the expected impact on these countries of very high levels of debt service, limited trade possibilities and costly climate events.

In this sense, the World Bank warns that one in four developing economies will continue to be poorer in 2024 than it was on the eve of the pandemic in 2019.

On the other hand, Global inflation is expected to moderate to 3.5% in 2024 and 2.9% in 2025but the pace of decline is slower than expected just 6 months ago, which means that many central banks will adopt a cautious attitude regarding the reduction of interest rates, which will remain on average at 4% for the period of 2025-26, approximately double the average of the period of 2000-19.

“Although food and energy prices have moderated around the world, the inflation remains relatively high and could remain that way,” said Ayhan Kose, deputy chief economist and director of the World Bank’s Outlook group.

“This situation could prompt central banks in major advanced economies to delay interest rate cuts. In a ‘higher for longer’ rate environment, global financial conditions would be tighter and growth much weaker in developing economies,” she warned.