Global Growth Set to Stabilize at 2.6 Percent in 2024
The latest World Bank report predicts that global growth will remain steady at 2.6 percent in 2024, marking the first time in three years that growth has stabilized.
Despite geopolitical tensions and high interest rates, the report emphasizes the importance of safeguarding trade, supporting green and digital transitions, delivering debt relief, and improving food security to ensure robust growth.
Challenges and Opportunities Ahead
The analysis highlights that global growth is expected to hold steady despite ongoing geopolitical tensions and high interest rates. The report projects a gradual increase in growth to 2.7 percent in 2025-26, driven by expansions in trade and investment.
Central banks are expected to remain cautious about easing policy, with benchmark interest rates remaining double the 2000-19 average over the next few years.
Regional Perspectives on Growth
In most Emerging Market and Developing Economies (EMDE) regions, growth is expected to soften in 2024. This includes East Asia, the Pacific, Europe, Central Asia, Latin America, the Caribbean, and South Asia.
However, the Middle East and North Africa region is projected to see an increase in growth, albeit less robust than initially forecasted.
Insights into the MENA Region
The report delves into the economic activity of oil exporters and importers in the Middle East and North Africa (MENA) region, noting a weakened performance from early to mid-2024.
Growth in GCC countries is anticipated to pick up in 2024 and 2025, driven by increased oil production and strengthened activity. Saudi Arabia is expected to see advancements in both non-oil and oil sectors.
Potential Risks on the Horizon
The report warns of potential risks such as regional armed conflicts, tightening global financial conditions, and severe weather events induced by climate change in the MENA region.
Countries with high government debt could face increased debt-service burdens due to higher borrowing costs and financial instability risks. However, stronger-than-expected growth in the US could benefit the region’s exports.