HomeEconomyThe World Bank raises its growth forecast for 2023, more cautious for...

The World Bank raises its growth forecast for 2023, more cautious for 2024

Real-world gross domestic product (GDP) is expected to grow 2.1% this year, the World Bank says in its latest Global Economic Outlook report.

The World Bank raised its global growth forecast for 2023 on Tuesday as the United States and other major economies proved more resilient than expected, while warning that higher interest rates would trigger a larger-than-expected slowdown next year. anus.

Real-world gross domestic product (GDP) is expected to grow 2.1% this year, the World Bank says in its latest World Economic Outlook report. In its previous report from January, it forecast growth of 1.7% for this year. Despite this increase, the World Bank forecast remains well below the 3.1% GDP growth achieved in 2022.

For 2024, global growth was revised down to 2.4%, compared with the 2.7% expected in January, and the institution cited the lingering effects of more restrictive monetary policies, which in particular reduce business and residential investment. “Growth is expected to slow significantly over the remainder of 2023, as it is held back by the lagged and lingering effects of monetary tightening and tighter credit conditions,” the World Bank said.

The World Bank expects global growth to pick up to 3.0% in 2025.

Growth of 0.4% for the euro zone in 2023

In January, he warned that the pace of world GDP growth was slowing to the point of approaching recession, but the strength of the labor market and consumption in the United States has been stronger than expected, as has the recovery of the Chinese economy after the end of the restrictions related to COVID-19.

US economic growth for 2023 is now forecast at 1.1%, more than double the 0.5% forecast in January, while China’s growth is expected to hit 5.6% from 4, 3% forecast in January, and after slower COVID-induced growth of 3% in 2022 The World Bank, however, halved its growth forecast for the United States in 2024, to 0.8%, and lowered by 0.4 percentage points its forecast for China, at 4.6%.

For the euro area, the growth forecast rose to 0.4% in 2023 compared to the stability of the GDP expected in January.

A chance of recession in 2024

The tensions in the banking sector are also contributing to the tightening of financial conditions, which will continue in 2024, explains the institution. The World Bank points to a negative scenario in which banking tensions would translate into a sharp contraction of credit and greater turbulence in the financial markets of advanced economies. That could cut global growth in 2024 by almost half, to just 1.3%, which would be the weakest growth in 30 years, excluding the recessions of 2009 and 2020.

According to the institution, inflation should gradually decrease as growth and labor demand in many economies slow and commodity prices stabilize. However, core inflation is expected to remain above central bank targets in many countries through 2024, the World Bank estimates.

Author: TT with Reuters
Source: BFM TV

Stay Connected
16,985FansLike
2,458FollowersFollow
61,453SubscribersSubscribe
Must Read
Related News

LEAVE A REPLY

Please enter your comment!
Please enter your name here