(OPINION) The global economy will slow in 2024 for the third straight year and appears headed for its weakest half-decade since the early 1990s, the World Bank said Tuesday in its latest annual forecast.
While higher interest rates appear to be bringing inflation under control without the serious financial crisis or soaring unemployment that many had feared, the global economy’s overall performance is lagging, said Indermit Gill, the bank’s top economist.
After rebounding sharply in 2021 from the depths of the pandemic, the global economy grew by 3 percent in 2022, dipped to a 2.6 percent rate last year, and is expected to post a tepid 2.4 percent this year, the bank said in its annual Global Economic Prospects report. Those rates lag the 3.1 percent average for the decade of the 2010s.
The continuing slowdown all but guarantees that world leaders will fail to meet the 2030 development goals that 193 members of the United Nations, including the United States, agreed to in 2015.
Governments pledged to transform the global economy by the end of this decade by setting 17 ambitious aims, including eliminating extreme poverty, cutting greenhouse gas emissions nearly in half, boosting education for the poor and eradicating hunger.
The measures were not legally binding. But resulting from three years of negotiations, and introduced at the United Nations with an address from Pope Francis, they were seen as packing a moral punch.
“The 2020s have so far been a period of broken promises. Governments across the world have fallen short of the ‘unprecedented’ goals they promised to meet by 2020,” Gill wrote in a foreword to the report, which labeled the outlook “wretched.”
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In a quarter of the world’s developing countries, people are poorer today than they were before the pandemic, the bank said.
“When you look at the big picture, it’s not pleasant,” said Ayhan Kose, the bank’s deputy chief economist.
Still, the bank celebrated progress in bringing inflation under control, as supply chain kinks were ironed out and higher borrowing costs cooled business activity. Globally, inflation is expected to average 3.7 percent this year, down from 5.3 percent in 2023.
But prices are likely to continue rising faster than central banks such as the Federal Reserve say is advisable well into this year.
