World Bank forecasts steady global economic growth at 2.6 percent for 1st time in 3 years


(MENAFN) According to a report released by the World Bank, the world Economy is anticipated to experience a growth rate of 2.6 percent this year, with expectations of maintaining a consistent expansion trajectory throughout the year, devoid of significant fluctuations. This forecast marks a notable milestone, as it signals the first time in three years that the global growth rate is expected to remain stable, despite escalating geopolitical tensions and prevailing high interest rates.

Looking ahead, the report forecasts a slight uptick in growth to 2.7 percent in the period spanning 2025-2026, driven primarily by moderate increases in both trade and investment activities. While this projection represents a marginal improvement from the World Bank's January estimates of 2.4 percent growth, it still falls short of the pre-pandemic average of 3.1 percent growth witnessed in the decade preceding the global health crisis.

The World Bank's latest growth outlook implies that over the course of 2024-2026, countries collectively representing more than 80 percent of the world's population and global economy are expected to experience slower growth compared to pre-pandemic levels. Despite signs of economic stabilization, ongoing challenges such as conflicts, inflationary pressures, and monetary tightening continue to dampen the pace of global economic recovery.

Addressing the current economic landscape, Indermit Gill, the World Bank's chief economist and senior vice president, noted, "Four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying. However, growth is at lower levels than before 2020." This assessment underscores the resilience of the global economy amidst prevailing uncertainties, while also highlighting the need for sustained efforts to foster inclusive and sustainable growth.

Looking specifically at developing economies, the report projects an average growth rate of 4 percent over the period 2024-2025, indicating a slight deceleration compared to the previous year. Notably, growth in low-income economies is expected to see an uptick, increasing to 5 percent in the current year from 3.8 percent in 2023. This projection reflects the varying growth trajectories across different segments of the global economy, underscoring the importance of targeted policy interventions to support inclusive growth and resilience in the face of evolving challenges.

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