World Bank revises up global growth forecast for 2024

By Tuba Ongun

The World Bank on Tuesday revised the global growth forecast for this year to 2.6%, up 0.2 percentage point from its previous projection.

The figure is foreseen to hold steady compared to last year for the first time in three years despite heightened geopolitical tensions and high interest rates, the bank said in its latest Global Economic Prospects report.

The upward revision was led by continued solid growth in the US, it stressed.

The bank forecast the gross domestic product (GDP) growth will edge up to an average of 2.7% in 2025-26 amid modest growth in trade and investment.

The figure is below the 3.1% average in the decade before the pandemic or 2010-19.

"Four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying," said Indermit Gill, the World Bank Group’s chief economist and senior vice president.

The GDP in developing economies are forecast to increase 4% on average in 2024-25 and in advanced economies to hike 1.5% this year before rising to 1.7% next year.

Gill underlined the need for developing economies to find ways to encourage private investment, reduce public debt, and improve education, health, and basic infrastructure.

The report highlighted that one in four developing economies is expected to remain poorer than it was in 2019.

The World Bank hiked its growth projection for China by 0.3 percentage point to 4.8% this year, due to stronger-than-expected activity in early 2024, particularly exports. The world's second-largest economy is projected to grow 4.1% in 2025, down 0.32 point from the January report.

The GDP in the US is expected to increase by 2.5% this year and 1.8% next year, with upward revisions of 0.9 point and 0.1 point, respectively.

The euro area's GDP growth is projected to come in at 0.7% in 2024, the same as foreseen in the previous report, and 1.4% in 2025, a downward revision of 0.2 points.

The Turkish economy's growth forecast was cut by 0.1 point to 3% for 2024 and 0.3 point to 3.6% for next year.

The World Bank projected the global inflation to average at 3.5% this year and 2.9% in 2025.

Global interest rates are likely to remain high by the standards of recent decades -- averaging about 4% over 2025-26, roughly double the 2000-19 average, read the report.