Subdued Global Growth

The global economy is recovering from consecutive years of negative shocks, but the pace of growth remains lackluster. The report projects global growth to hold steady at 2.6% in 2024, a rate insufficient for progress on key development goals and well below the 3.1% average in the decade before COVID-19. This subdued outlook is observed across both advanced economies and emerging markets and developing economies (EMDEs), with growth over the forecast horizon expected to be nearly half a percentage point below its 2010-19 average pace. This sluggish growth is partly due to persistent inflation, which is projected to moderate but at a slower pace than previously anticipated. This necessitates a cautious approach to monetary policy easing, with average benchmark policy interest rates expected to remain about double the 2000-19 average. The report highlights that in 2024-25, growth is set to underperform its 2010s average in nearly 60% of economies, representing more than 80% of the global population and world output. This underscores a secular deceleration of potential growth in many large economies, particularly those that experienced high rates of inflation, much of which stemmed from shocks to supply chains and commodity prices.