A job fair was held in Chongqing, a city in southwestern China, on April 11, 2023.
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The world economy is on track to record its worst five-year growth in 30 years, according to the World Bank.
The group said in its latest World Economic Outlook report released on Tuesday that it expects global growth to slow for the third consecutive year in 2024, falling to 2.4% from 2.6% in 2023. .
Growth is then expected to rise slightly to 2.7% in 2025, but the five-year acceleration will still be almost three-quarters of a percentage point below the average growth rate of the 2010s.
Additionally, although the global economy has proven resilient in the face of recession risks in 2023, rising geopolitical tensions will present new challenges in the short term. Economic growth for most of 2024 and 2025 will be slower than in the past decade, the group said. .
“There is war in Eastern Europe and Russia’s invasion of Ukraine. There are serious conflicts in the Middle East. The escalation of these conflicts could have a significant impact on energy prices, leading to inflation and economic growth. ,” Ayhan Kose, World Bank deputy chief economist and director of the Outlook Group, told CNBC’s Sylvia Amaro.
The bank warned that without a “significant course correction”, the 2020s will remain a “decade of wasted opportunities”.
On a regional basis, growth this year is expected to be slowest in North America, Europe, Central Asia, and Asia-Pacific, mainly due to slower growth in China. Latin America and the Caribbean are expected to see some improvement from low levels, while the Middle East and Africa are expected to see more significant improvement.
Still, developing countries are likely to be hit hardest over the medium term, as weak global trade and tight financial conditions weigh on growth.
“Near-term growth will remain weak and many developing countries, especially the poorest, will be trapped, with paralyzing levels of debt and almost one in three people lacking access to food.” Mr. Gill said.
Economic growth in developing countries is currently expected to be just 3.9% in 2024, more than 1 percentage point below the average of the past decade. By the end of the year, about a quarter of people in developing countries and 40% of people in low-income countries will be poorer than they were on the eve of the 2019 coronavirus pandemic, the group said.
The bank said the data showed the world was falling short of its goal of a Decade of Transformation to tackle extreme poverty, major infectious diseases and climate change. But he added that there was a chance to turn the tide if governments acted quickly to increase investment and strengthen fiscal policy frameworks.
“The investment boom has the potential to transform developing economies, accelerate the energy transition and help achieve a range of development goals,” Kose said in a statement released ahead of next week’s World Economic Forum. stated in the report. They meet at annual meetings to discuss global political, economic, and social issues.
He added: “To spark such a boom, developing countries must improve their fiscal and financial frameworks, expand cross-border trade and capital flows, improve their investment environments, and improve the quality of their institutions.” We need to implement a comprehensive policy package to strengthen the
“It’s a daunting task, but many developing countries have been able to do it in the past. Doing it again will help cushion the expected slowdown in potential growth over the rest of the decade.” .”