World Bank Upgrades Global Economic Outlook, Cautions On Trade Barriers

Israeli soldiers move on the back of a truck near the Israeli-Gaza border as seen from southern Israel, Monday, June 10, 2024. The World Bank upgraded the outlook for the global economy this ye

The World Bank has revised its global economic outlook, projecting a 2.6% expansion for 2024, up from the previously estimated 2.4%. This growth is largely driven by the sustained economic performance of the United States, which is expected to grow by 2.5% this year. Despite this positive development, the World Bank has highlighted concerns about sluggish global growth, particularly in the face of rising trade barriers and ongoing conflicts in regions such as Ukraine and Gaza.

The U.S. economy experienced a slowdown in the first quarter of the year, expanding at a rate of 1.3%, attributed to temporary factors such as increased imports and reduced business inventories. However, consumer spending and business investment remained robust during this period.

Global inflation has moderated from 7.2% in 2022 to a forecasted 3.5% in 2024, although it remains above central banks' targets. The World Bank warns that maintaining high interest rates to combat inflation could potentially hinder economic growth, emphasizing the need to strike a balance to avoid prolonged sluggishness.

Emerging market and developing countries are expected to grow collectively by 4% in 2024, down from 4.2% in 2023. China is facing challenges due to a weakening real estate market and subdued consumer confidence, with its growth rate projected to slow to 4.8% this year.

U.S. economy expected to grow by 2.5% in 2024.

Global economic growth revised to 2.6% for 2024.

Inflation forecasted to decrease to 3.5% in 2024.

Latin America is forecasted to experience a slowdown in growth to 1.8% in 2024, while sub-Saharan Africa is expected to see modest growth at 3.5%. European countries using the euro currency are anticipated to achieve 0.7% growth, impacted by geopolitical tensions, especially related to Russia's conflict with Ukraine.

Japan's economic growth is forecasted to decelerate to 0.7% in 2024, reflecting sluggish consumer spending and weak exports. Global trade growth has been lackluster, with world trade volume expanding by only 0.1% last year and a projected 2.5% growth in 2024.

The World Bank emphasizes the importance of dialogue and cooperation to address trade challenges, advocating for finding common ground rather than resorting to trade barriers that could impede global economic progress.