The recently released Global Economic Prospects Report by the World Bank, India is predicted to remain the fastest-growing major economy globally, with a projected GDP growth rate of 6.6% for FY25.
About the Report
- Anticipates global trade growth in 2024 to be only half of the average in the decade preceding the pandemic.
- Projects a slowdown in global growth for the third consecutive year, dropping from 2.6% in 2023 to 2.4% in 2024.
- Emphasizes the need for increased investments to address climate change and achieve global development goals by 2030.
- Developing countries, to meet climate and development targets, need to increase investments by approximately $2.4 trillion annually.
- The report underscores challenges in sustaining economic growth, particularly in the aftermath of the pandemic, and emphasizes the importance of substantial investments for a sustainable and resilient global economy.
Important highlights of the published reports
- Better Outlook Than Last Year: Due to the resilience of the US economy, there is less chance of a worldwide recession this year, which has improved the state of the world economy overall. But increasing global tensions could create fresh near-term threats for the world economy.
- Global Growth: From 2.6% in 2023 to 2.4% in 2024, it is predicted that the world’s growth would slow for the third year in a row.The growth rate of developing economies is expected to be merely 3.9%, which is more than 1% less than the average for the preceding ten years. Lower than anticipated, low-income countries are likely to increase by 5.5%.
- Medium-Term Prospects for Developing Economies are deteriorating: Although the state of the world economy is stronger now than it was a year ago, many emerging economies’ medium-term prospects have gotten worse. Slowing growth, weak global trade, and tight financial conditions are some of the contributing factors.
- Slowest Half-Decade of Gross Domestic Product (GDP) Growth in 30 Years: With a growth rate of 2.4% in 2024, the world economy is expected to develop at its weakest pace in three decades.
- Problems with International Trade and Borrowing Costs: It is anticipated that trade will rise globally by just half as much in 2024 as it did in the ten years before the pandemic. It is anticipated that borrowing would continue to be expensive for developing economies, particularly those with poor credit ratings.
- Low Growth in the Near future and High Debt: Low growth in the near future is predicted, especially in developing nations, which will result in high debt levels and restricted access to food. That would hinder in the advancement of numerous international goals.
Some of the suggestions given by the Report are
- In order to prevent a missed opportunity in the present decade, immediate action is required to tighten fiscal policy frameworks and expedite investment.
- The report recommends that developing nations invest ‘formidable’ amounts, almost USD 2.4 trillion annually, to combat climate change and accomplish other important global development goals by 2030.
- The implementation of comprehensive policy packages, encompassing enhancements to fiscal and monetary frameworks, growth of cross-border trade and financial flows, amelioration of the investment climate, and reinforcement of institutional quality, is imperative for the developing economies.
FAQs
What is the Global Economic Prospects Report?
The Global Economic Prospects Report is a publication by the World Bank that provides an analysis of the global economy, including economic trends, projections, and potential risks.
How often is the Global Economic Prospects Report published?
The report is published twice a year, typically in January and June.