WB: World economy to slow anew in 2024

WASHINGTON, D.C.: Hobbled by high interest rates, persistent inflation, slumping trade and a diminished China, the global economy will slow for a third consecutive year in 2024.

That is the picture sketched by the World Bank, which forecast Tuesday that the world economy would expand just 2.4 percent this year. That would be down from 2.6 percent in 2023, 3 percent in 2022 and a galloping 6.2 percent in 2021, which reflected the robust recovery from the pandemic recession of 2020.

Heightened global tensions, arising particularly from Israel's war with Hamas and the conflict in Ukraine, pose the risk of even weaker growth. And World Bank officials expressed worry that deeply indebted poor countries cannot afford to make necessary investments to fight climate change and poverty.

«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,» Indermit Gill, the World Bank's chief economist, said in a statement.

In recent years, the international economy has proved surprisingly resilient in the face of shock after shock: the pandemic, Russia's invasion of Ukraine, resurgent global inflation and the burdensome interest rates that were imposed by central banks to try to bring price increases back under control. The World Bank now says the global economy grew half a percentage point faster in 2023 than it had predicted back in June and concludes that «the risk of a global recession has receded.''

Leading the way in 2023 was the United States, which likely registered 2.5-percent growth last year — 1.4 percentage points faster than the World Bank had expected in mid-year. The World Bank, a 189-country anti-poverty agency, expects US growth to decelerate to 1.6 percent this year as higher interest rates weaken borrowing and spending.

The Federal Reserve (Fed) has raised US interest rates 11 times since March 2022. Its strenuous efforts have helped bring US inflation down from the four-decade high it reached in mid-2022 to nearly the Fed's 2-percent target level.

Higher rates are also taming global inflation, which the World Bank