World Bank raises growth outlook this year, cuts 2024 forecast
Jun 07, 2023
Washington [US], June 7: The World Bank has just raised its growth outlook for the global economy this year but cut its growth forecast for 2024.
In its Global Economic Outlook released on June 6, the World Bank (WB) forecast that the world economy will grow 2.1% in 2023, higher than the 1.7% forecasted. in January. However, this is still lower than the growth of 3.1% last year, according to Reuters.
The outlook for this year is raised as leading economies demonstrate better resilience than anticipated despite rising borrowing costs, according to the World Bank.
The US added 339,000 jobs in May, more than expected, despite the Federal Reserve (Fed) raising the benchmark interest rate 10 times in the past 15 months. The World Bank raised its forecast for US growth this year to 1.1%, still weak but much higher than its 0.5% forecast in January. China is expected to grow 5.6% in this year, higher than the 4.5% forecast in January.
On the other hand, according to this semi-annual report, the growth rate in 2024 is 2.4%, weaker than the forecast of 2.7% in the assessment in January. The reason is due to the negative effects. The late action of the central banks ' tightening monetary policy and the increase in credit conditions, caused investment to decline.
The WB believes that the world economy is likely to slow down much this year due to the impact of high interest rates, prolonged inflation, banking crisis, war in Ukraine and the Covid-19 pandemic. .
Indermit Gill, Chief Economist and Vice President of the World Bank, called the report dismal and forecast last year's synchronicity would continue this year.
The advanced economies are forecast to grow at just 0.7%, down sharply from 2.6% in 2022. That would be one of the weakest growth rates for this group in the past five decades.
Mr. Gill said two-thirds of developing economies will grow at a slower rate than in 2022, greatly impacting post-pandemic recovery and poverty reduction efforts and increasing the public debt crisis.
"By the end of next year, a third of developing countries will not reach the level of per capita income they had at the end of 2019," Gill forecast.
Source: ThanhNien Newspaper
