worldnewsfox.com – As the world approaches the midpoint of a decade of developmental transformation, the global economy will experience a record low by the end of 2024 – the slowest five-year Gross Domestic Product (GDP) growth in 30 years, according to the World Bank’s latest Global Economic Prospects Report https://www.losaztecasmxgrill.com/ .
On the one hand, the global economy is in better shape compared to last year: the risk of a global recession has reduced, mainly due to the strength of the US economy. But rising geopolitical tensions could create new dangers in the short term for the world economy. Meanwhile, the medium-term outlook for many developing countries is increasingly bleak amid slowing growth in most major economies, sluggish global trade and the tightest financial conditions in decades.
Global trade growth in 2024 is estimated to be only half the average global trade growth in the decade before the pandemic. Meanwhile, borrowing costs in developing countries—especially countries with poor credit ratings—are likely to remain high as global interest rates are at their highest level in four decades when adjusted for inflation.
World Economic Growth Slows
The World Bank held a discussion discussing Indonesia’s economic prospects in the future. The activity is ‘Outreach Event of the Indonesia Economic Prospects December 2023 Edition’, with the theme ‘Climate Action for Development’ which was held in the Hall of the Faculty of Mathematics and Natural Sciences, Syiah Kuala University (USK). Apart from its slow growth, there are many risks facing the world today, which could lead to more problems. Moreover, Indonesia is connected to other countries in the world, so this problem could have an impact on the Indonesian economy too.
For example, conflicts in the Middle East and Ukraine have increased geopolitical risks and caused shocks to commodity prices. Or financial market pressure due to changes in interest rates abroad. Additionally, climate change has affected many countries and led to more frequent disasters. Global growth is projected to slow for the third straight year—from 2.6 percent last year to 2.4 percent in 2024, nearly three-quarters of a percentage point below the 2010s average. Developing countries are expected to grow by only 3.9 percent, more than one percentage point below the average growth rate of the previous decade.
After last year’s disappointing performance, low-income countries are expected to grow by 5.5 percent, weaker than previously estimated. By the end of 2024, people in around one in every four developing countries and around 40 percent of low-income countries will remain poorer than they were at the time of the COVID pandemic in 2019. Meanwhile, in developed countries, growth is slowing to 1.2 percent this year from 1.5 percent in 2023.