Global growth is projected to stabilize at 2.6% in 2024, with only a slight rise to 2.7% by 2026, falling below the pre-pandemic average of 3.1%. Advanced economies are expected to grow by 1.5% in 2024, while Emerging Markets and Developing Economies (EMDEs) will see 4.0% growth, driven by regions like South Asia, with India leading at 6.6%. Low-income countries are forecasted to grow by 5.0% in 2024. Key risks include geopolitical tensions, high interest rates, and debt stress, particularly for EMDEs, which may hinder recovery.

1. Global Growth Overview

• Global GDP Growth is expected to stabilize at 2.6% in 2024 before increasing slightly to 2.7% in 2025-2026. This is significantly below the pre-pandemic average growth rate of 3.1% from 2010-2019​.
• By 2026, 80% of the world’s population will be living in countries where growth is slower than before COVID-19​.

2. Advanced Economies

• Growth in advanced economies is projected to be subdued, with an average growth of 1.5% in 2024 and increasing slightly to 1.7% in 2025. These figures are below the historical average of 2.0% for advanced economies​.
  • United States: Expected to grow by 2.5% in 2024, driven by resilient domestic demand and investment​.
  • Euro Area: Forecast to grow by only 0.7% in 2024, reflecting challenges from high inflation and energy prices​.
  • Japan: Growth is projected at 0.7% in 2024, slightly lower due to weak demand​.

3. Emerging Markets and Developing Economies (EMDEs)

• Growth in EMDEs is forecast to slow slightly to 4.0% in 2024 and remain steady at 4.0% in 2025-2026, below the 4.5% average of the previous decade​.
  • East Asia and Pacific: Growth is forecast at 4.8% in 2024, with China slowing to 4.8% due to weaker property sector demand​.
  • South Asia: Led by India, this region is expected to grow at 6.2% in 2024, with India alone forecast to expand at 6.6%, making it one of the fastest-growing regions​.
  • Sub-Saharan Africa: Projected to grow at 3.5% in 2024, and expected to rise to 4.0% by 2026​.

4. Growth in Low-Income Countries (LICs)

• Low-income countries are projected to grow at 5.0% in 2024, up from 3.8% in 2023, as they recover from commodity price shocks​.
• However, many low-income countries will remain poorer than pre-pandemic levels, and per capita income growth is expected to be just 3.0%​.

5. Global Growth Risks

• Geopolitical tensions, elevated global interest rates, and persistent inflation remain significant risks to global growth.
• About 40% of EMDEs are highly vulnerable to debt-related stress, which could hamper growth if global financial conditions tighten​.

Key Takeaways:

• Global growth remains below historical norms, with 2.6% expected in 2024, and 80% of the world’s economies will grow slower than before COVID-19​.
• The U.S. and India are bright spots in the global economy, while growth in China and Eurozone is slowing​.

Source: Global Economic Prospects June 2024 report