World Bank The global economy is on track for its worst five year growth in 30 years

The World Bank said in its latest Global Economic Prospects report released on Tuesday that the global economy faces its worst five-year growth in 30 years. In other words, it is weaker than the global financial crisis of 2008, the Asian financial crisis of the late 90s, and the dot-com bubble of early 2000.

The World Bank expects global economic growth to slow for the third consecutive year in 2024, from 26% down to 24%, and economic growth is expected to pick up slightly by next year, rising to 27%。Based on this calculation, the five-year economic growth rate is about 075 percentage points. This follows economic growth of 62% and 30%。

While the global economy has shown resilience in 2023 as it faces recession risks, heightened geopolitical tensions will pose new near-term challenges, causing most economies to grow more slowly this year and next year than they have over the past decade, the World Bank said. Economists at the World Bank cited the Russia-Ukraine conflict and the conflict in the Middle East, arguing that the escalation of these conflicts could have a significant impact on energy**, which in turn could affect inflation and economic growth.

The World Bank has warned that without a "major course correction", the 2020s will be a "decade of wasted opportunities."

Regionally, the World Bank expects growth to slow the most this year in North America, Europe, Central Asia, and the Asia-Pacific region. Latin America and the Caribbean is expected to improve slightly from a lower base, while the Middle East and Africa region is expected to see a more significant economic recovery.

Nonetheless, developing economies will be hit the hardest in the medium term, as the global downturn and tight financial conditions weigh heavily on economic growth. Currently, the World Bank expects developing economies to grow by just 3.0 percent this year9%, more than 1 percentage point below the average of the previous decade.

Indermit Gill, chief economist and senior vice president of the World Bank, said short-term growth will continue to be weak, leaving many developing countries, especially the poorest, in the lurch. Debt levels in these countries are paralyzing, and nearly a third of the population has limited access to food.

By the end of this year, about a quarter of people in developing countries and about 40 percent of low-income countries will still be poorer than they were in 2019, on the eve of the pandemic, according to World Bank estimates.

The World Bank said that the data showed that the goal of making the 2020s a "decade of change" — tackling extreme poverty, major infectious diseases and climate change — was not met. However, there is still a chance to reverse the situation if countries act quickly to increase investment and strengthen fiscal policy frameworks.

Ayhan Kose, Deputy Chief Economist and Head of the Outlook Unit at the World Bank, said:

The investment boom has the potential to transform developing economies, helping them accelerate their energy transition and achieve their development goals. To promote this prosperity, developing economies need to implement a comprehensive policy package to improve fiscal and monetary frameworks, expand cross-border** and financial flows, improve the investment climate, and strengthen institutional quality. It's hard work, but many developing economies have been able to do it before. Doing so again would help to mitigate the expected slowdown in growth for the remainder of the decade.