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World Bank upgrades global growth outlook on resilient US economy

The World Bank raised its global growth outlook on Tuesday on the back of resilient consumer spending in the United States.

The World Bank has raised its outlook for global growth in 2024
The World Bank has raised its outlook for global growth in 2024 - Copyright AFP/File Daniel SLIM
The World Bank has raised its outlook for global growth in 2024 - Copyright AFP/File Daniel SLIM

The World Bank raised its global growth outlook on Tuesday on the back of resilient consumer spending in the United States, but warned that growth remains weak by historical standards.

In updated forecasts, the Washington-based development lender said it now expects the world economy to grow by 2.6 percent this year in real terms, up 0.2 percentage points from its last update in January.

Its global growth forecast for 2025 remains unchanged at 2.7 percent — below the average rate of 3.1 percent seen in the decade before the Covid-19 pandemic. 

“Growth is at lower levels than before 2020,” World Bank group chief economist Indermit Gill said in a statement, adding that the prospects for the world’s poorest economies “are even more worrisome.”

“They face punishing levels of debt service, constricting trade possibilities, and costly climate events,” Gill said, adding that they would need to find ways to bring in new private investment and reduce public debt.

The bank now expects emerging market and developing economies to grow by 4.0 percent this year, slightly above the January forecast but also below pre-pandemic levels. 

The World Bank upgraded its 2024 growth forecast for the world’s advanced economies to 1.5 percent — up 0.3 percentage points — due almost entirely to a sharp rise in its projected outlook for the United States.

It now expects the US economy to grow by 2.5 percent this year, up 0.9 percentage points from January, fueled largely by “robust” consumption and government spending, as well as a reduction in imports. 

The upgrade to the US outlook is responsible for 80 percent of the increase to the global growth outlook for 2024, World Bank deputy chief economist Ayhan Kose told reporters ahead of the report’s publication. 

The World Bank also upgraded the growth outlook for China, the world’s second-largest economy, but said it still expects a slowdown this year amid a decline in real estate activity.

It now expects growth of 4.8 percent this year, 0.3 percentage points higher than in January.  

AFP
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