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On the 11th local time, the World Bank (hereinafter referred to as "the Bank") released the latest edition of the "Global Economic Prospects" report, stating that the global economy in 2024 is expected to experience stable growth for the first time in three years, but it is still weak compared to historical levels.

The Bank forecasts that the global economic growth rate will stabilize at 2.6% in 2024 and slightly rise to an average of 2.7% in 2025-2026. This is below the average of 3.1% in the decade before the pandemic.

The report estimates that the average growth rate of developing economies will be 4% in 2024-2025, slightly lower than in 2023. The economic growth rate of developed economies will stabilize at 1.5% in 2024, then rise to 1.7% in 2025.

The Chief Economist and Senior Vice President of the World Bank Group, Mr. Gill, said: "After four years of turmoil caused by the pandemic, conflicts, inflation, and monetary tightening policies, global economic growth seems to be stabilizing, but at a slower pace than before 2020."

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"Developing economies must find ways to encourage private investment, reduce public debt, and improve education, healthcare, and basic infrastructure," he stated.

Global inflation is expected to slow to 3.5%

The Bank expects global inflation to slow to 3.5% in 2024 and decrease to 2.9% in 2025, but the decline is slower than the forecast six months ago. As a result, it is anticipated that many central banks will remain cautious in lowering policy interest rates. By the standards of recent decades, global interest rates are likely to remain high—approximately 4% on average for 2025-2026, about twice the average level from 2000 to 2019.

The Deputy Chief Economist and Director of the Forecasting Bureau of the World Bank, Mr. Goss, commented: "Although global food and energy prices have retreated, core inflation remains relatively high and could persist. Central banks in major developed economies may delay interest rate cuts as a result. Prolonged high interest rates imply tighter global financial conditions, which will significantly slow the growth of developing economies."

The Bank predicts that the growth of global trade volume will reach 2.5% in 2024, an increase from the 2.3% forecasted in January, following a growth rate of only 0.1% in 2023.

Furthermore, it is estimated that one-quarter of developing economies will still have poverty levels higher than before the pandemic this year. For fragile and conflict-affected countries and regions, this proportion is double that of the former.Additionally, the report states that between 2020 and 2024, nearly half of the developing economies have seen an increase in the income gap with developed economies, marking the highest proportion since the 1990s. It is projected that from now until 2026, the average annual income growth for these economies will be 3.0%, significantly lower than the 3.8% average seen in the decade prior to the pandemic.

Economic Growth Rates by Region

In this instance, the World Bank has revised the GDP growth forecast for the United States in 2024 from 1.6% to 2.5%; the Eurozone's growth rate is 0.7%, consistent with the prediction made six months ago; Japan's is 0.7%, lower than the 0.9% in January; India's economic growth rate for 2024 is projected to be 6.6%, an increase from the 6.4% forecasted in January.

By region, in the East Asia and Pacific region, the growth rate is expected to drop to 4.8% in 2024 and further to 4.2% in 2025. Among them, the World Bank anticipates China's growth rate for 2024 to be 4.8%, 0.3 percentage points higher than the forecast in January, primarily due to stronger-than-expected economic activity at the beginning of 2024, especially in exports.

In the East Asia and Pacific region excluding China, following last year's growth that was below average, economic activity this year is expected to rebound to 4.6%. The uptick in global merchandise trade will support growth, benefiting exports and industrial activities. The World Bank forecasts that some of the most export-oriented economies, including Thailand and Vietnam, will see an acceleration in economic activity.

In the South Asia region, the growth rate is expected to decrease to 6.2% in 2024 and remain at 6.2% in 2025. This mainly reflects the stable growth of India. Excluding India, the region's growth is expected to rebound to 3.9% in 2024 and to 4.4% in 2026.

In the Europe and Central Asia region, the growth rate is projected to drop to 3.0% in 2024 and further to 2.9% in 2025; in the Latin America and Caribbean region, the growth rate is expected to decrease to 1.8% in 2024 and rise to 2.7% in 2025; in the Middle East and North Africa region, the growth rate is anticipated to increase to 2.8% in 2024 and to 4.2% in 2025.

Furthermore, the report points out that since the global financial crisis, the growth of public investment in developing economies has halved, with the average annual growth rate over the past decade falling to 5%. However, public investment can serve as a powerful policy lever. For developing economies with sufficient fiscal space and high government expenditure efficiency, every one percentage point increase in the share of public investment in GDP can lead to a 1.6% increase in medium-term output.