On Tuesday, the World Bank predicted that the global economy will slow in 2024, marking the third straight year that it has issued this prediction.
According to forecasts from the World Bank, the global economy is expected to grow only 2.4% in 2024. If that proves to be true, it would represent a drop from the 2.6% growth that happened in 2023, the 3% growth that happened in 2022 and the 6.2% growth that happened in 2021.
The outlier year of 2021 was bolstered in large part by recovery from the COVID-19 pandemic.
The World Bank cited issues such as a struggling economy in China, inflation and high interest rates around the world as reasons why the global economy is expected to perform this way again.
In terms of U.S. growth, the World Bank believes it’ll be slower in 2024 as well, with forecasted growth of only 1.6% this year, compared to 2.5% last year.
In a statement, Indermit Gill, the chief economist at the World Bank, said:
“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.”
In addition to this slow economic growth, the World Bank predicted that there would be much instability throughout the world in 2024. Much of that will be fueled by rising tensions across the globe, especially with ongoing wars between Israel and Hamas as well as Russia and Ukraine.
In a separate statement, the World Bank said:
“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.”
Compared to many other countries, the U.S. economy is fairly strong. Domestic inflation is continuing to slow as well.
There are plenty of other global economies that aren’t in as strong of a position, though. With global trade expecting to be slower in 2024, growth throughout a good portion of the world is expected to be hampered as well.
In developing countries, the problem could prove to be a lot. It’s very difficult for people and businesses to borrow money there, as interest rates are sky high.
As a result, both growth and investment in these countries slows. According to the World Bank, developing countries may grow by only 3.9% this year, which is a full point below the average for the entire decade of the 2010s.
As the World Bank said:
“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.
“Without a major course correction, the 2020s will go down as a decade of wasted opportunity.”