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

Global growth is projected to stabilize at 2.6% in 2024, rising to 2.7% by 2025-2026, which is slower than the pre-COVID average of 3.1%. Emerging Market and Developing Economies (EMDEs) are forecasted to grow at 4.0% in 2024, with Sub-Saharan Africa growing at 3.5%. Global inflation is expected to moderate to 3.5%, though it will remain above pre-pandemic levels, especially in EMDEs. Oil prices are set to average $84 per barrel in 2024, while non-energy commodity prices remain stable. Risks to growth include geopolitical tensions and high debt distress in 40% of EMDEs.

1. Global Growth:
   • Global GDP growth is projected to stabilize at 2.6% in 2024, with an expected increase to 2.7% in 2025-2026. This growth is slower than the 3.1% average in the decade before COVID-19​.
   • By 2026, 80% of the world’s population will experience slower growth compared to pre-pandemic levels.
2. Regional Growth:
   • Emerging Market and Developing Economies (EMDEs) are forecast to grow at 4.0% in 2024, down from 4.2% in 2023. China’s growth is expected to slow to 4.8% in 2024.
   • Sub-Saharan Africa is expected to grow at 3.5% in 2024, with a rise to 4.0% in 2026​.
3. Global Inflation:
   • Inflation is projected to moderate to 3.5% globally in 2024, but it will remain higher than pre-pandemic levels​.
   • Inflation in EMDEs is expected to decline but will remain challenging for many regions due to commodity price fluctuations.
4. Commodity Prices:
   • Oil prices are projected to be slightly higher in 2024, averaging $84 per barrel, but lower than 2023 prices​.
   • Prices for non-energy commodities are expected to remain stable​.
5. Risks to Global Growth:
   • Escalating geopolitical tensions and trade fragmentation pose significant risks to global growth.
   • Debt distress risks remain high for 40% of EMDEs, with many economies vulnerable to shocks​.

Source: Global Economic Prospects June 2024 report

Global growth prospects in 2024 show diverse regional dynamics. South Asia is the fastest-growing region, with projected growth of 6.2%, driven by India’s 6.6% expansion. East Asia and Pacific (EAP) growth is expected at 4.8%, led by China, though slowing due to structural issues. Sub-Saharan Africa (SSA) will see a modest improvement to 3.5%, while Europe and Central Asia (ECA) and the Middle East and North Africa (MENA) regions forecast 3.0% and 2.8% growth, respectively. Latin America and the Caribbean (LAC) will have the slowest growth at 1.8%, constrained by fiscal challenges and weak investment.

1. East Asia and Pacific (EAP)

• Growth in 2024: Projected at 4.8%, slightly down from 5.1% in 2023.
• Key Driver: China accounts for the majority of the region's growth but is slowing to 4.8% in 2024, from 5.2% in 2023, due to property sector weakness and structural slowdowns​.
• Excluding China: The rest of the region, including countries like Indonesia, will grow at around 5.0%, buoyed by strong domestic demand and investment​.

2. Europe and Central Asia (ECA)

• Growth in 2024: Forecast at 3.0%, slightly slower than 3.2% in 2023.
• Russia: The recovery is fragile, with 2.9% growth expected in 2024 after a 3.6% rebound in 2023, influenced by high inflation and sanctions​.
• Türkiye: Growth is forecast at 3.0% in 2024, down from 4.5% in 2023​(GEP-June-2024).
• The region faces challenges such as geopolitical tensions, inflation, and energy dependence​.

3. Latin America and the Caribbean (LAC)

• Growth in 2024: Forecast at 1.8%, down from 2.2% in 2023.
• Key Drivers:
  • Brazil: Projected to grow by 2.0% in 2024, slower than 2.9% in 2023, constrained by high interest rates and fiscal concerns​.
  • Mexico: Expected to grow at 2.3% in 2024, compared to 3.2% in 2023, due to weak investment​.
• Structural challenges and external demand, particularly from China and the U.S., are limiting the region's growth.

4. Middle East and North Africa (MENA)

• Growth in 2024: Forecast at 2.8%, an improvement from 1.5% in 2023.
• Key Drivers:
  • Saudi Arabia: Set to grow at 2.5% in 2024, after a contraction of -0.9% in 2023, driven by oil production adjustments and diversification efforts​.
  • Egypt: Growth is projected at 2.8% in 2024, down from 3.8% in 2023, amid fiscal challenges​.
• The region’s growth is influenced by fluctuating oil prices and geopolitical risks.

5. South Asia

• Growth in 2024: Forecast at 6.2%, making it the fastest-growing region globally.
• Key Driver: India, which is expected to grow at 6.6% in 2024, driven by strong domestic demand, investment, and a robust services sector​.
• Bangladesh is forecast to grow at 5.6% in 2024, with challenges such as inflation affecting growth​.
• South Asia's growth outlook is buoyed by internal demand but faces risks from external pressures such as higher global interest rates and energy prices.

6. Sub-Saharan Africa (SSA)

• Growth in 2024: Projected at 3.5%, an improvement from 3.0% in 2023.
• Key Drivers:
  • Nigeria: Expected to grow by 3.3% in 2024, supported by higher oil production and economic reforms​.
  • South Africa: Growth is projected at 1.2% in 2024, constrained by energy supply issues and weak domestic demand​.
• Commodity exporters are benefiting from stabilizing prices, but fiscal constraints and debt remain significant challenges for many countries in the region.

7. Low-Income Countries (LICs)

• Growth in 2024: Forecast at 5.0%, up from 3.8% in 2023, reflecting recovery in commodity-exporting economies​.
• These countries are still grappling with challenges such as debt stress, conflict, and food insecurity, leading to uneven recovery​.

Summary of Regional Outlooks:

• Fastest Growing Region: South Asia, driven by India with 6.6% growth.
• Slowest Growing Region: Latin America and the Caribbean, at 1.8% in 2024, largely due to fiscal and structural challenges.
• Middle East and North Africa shows recovery with 2.8% growth, while Sub-Saharan Africa improves to 3.5%​.

Source: The Global Economic Prospects June 2024 report

Commodity prices are projected to stabilize after the volatility caused by the COVID-19 pandemic and the war in Ukraine, though they will remain at historically high levels. In 2024, oil prices are forecast to rise to $84 per barrel, up from $82.6 in 2023, but will gradually decline to $78.1 per barrel by 2026. Non-energy commodities, including metals and agricultural products, are expected to see modest declines, with the non-energy index slightly decreasing to 110.1 in 2024. However, risks such as geopolitical tensions, climate change, and trade disruptions could still affect price trends globally.

1. Overview of Commodity Prices

• Commodity prices have stabilized after the sharp fluctuations seen during the COVID-19 pandemic and the war in Ukraine. Prices for both energy and non-energy commodities are expected to remain at historically high levels but will show modest declines over the forecast horizon.
• Aggregate commodity prices are expected to decline in 2024, though fluctuations in specific sectors (like energy and food) will continue to drive inflation and impact global trade​.

2. Energy Prices

• Oil prices are expected to remain elevated due to tight supply-demand balances, geopolitical tensions, and production cuts by major oil-producing countries.
  • In 2024, oil prices (Brent crude) are forecast to average $84 per barrel, slightly higher than the $82.6 per barrel in 2023​.
  • Prices are projected to ease to $79 per barrel by 2025 and $78.1 per barrel in 2026​.
  • Natural gas prices and coal prices are expected to remain lower in 2024 compared to the peaks seen during the energy crises of 2022-2023​.
• Energy index: The index, which tracks overall energy prices, is expected to decline modestly in 2024 by 0.6%, reflecting decreases in coal and natural gas prices​.
  • Energy index: In 2024, the World Bank's energy index is projected to drop to 104.0, down from 106.9 in 2023​.

3. Non-Energy Commodities

• Metals prices are expected to remain stable, with demand pressures balancing out due to increased investment in green technologies (e.g., electric vehicles and renewable energy infrastructure).
  • Prices for metals are forecast to stabilize, driven by the demand for metals-intensive green energy projects, offsetting reduced demand from China’s real estate sector​.
• Agricultural prices are expected to decline modestly due to well-supplied global markets, particularly for food crops like grains and edible oils.
  • Grain prices are projected to decline slightly, supported by improved harvests and less volatile global supply chains​.

4. Food and Agricultural Commodities

• Food prices: Although still elevated, global food prices are expected to stabilize and decline slightly over the forecast horizon. The non-energy commodity index is expected to see a modest decrease of 0.2% in 2024​.
  • Food prices: High food prices driven by supply disruptions in previous years are expected to stabilize in 2024, reflecting better weather conditions and fewer disruptions in global supply chains​.
• Non-energy index: This index, which includes agricultural and metals prices, is projected to decline slightly in 2024 to 110.1, down from 110.2 in 2023, showing little movement overall​.

5. Risks to Commodity Prices

• Geopolitical tensions: Continued geopolitical tensions, particularly in regions rich in energy resources like the Middle East, could drive up oil prices unexpectedly, leading to higher inflation globally.
• Climate-related disruptions: Extreme weather events could impact food production, leading to sudden price spikes for agricultural commodities, especially food crops​.
• Trade fragmentation: Growing protectionism and trade barriers could lead to supply chain disruptions, particularly in energy and agricultural markets, pushing prices higher​.

6. Long-Term Projections

• While oil prices are expected to decline gradually to $78.1 per barrel by 2026, non-energy commodities (particularly metals) will maintain stable demand driven by the ongoing energy transition.
• Agricultural prices will continue to be influenced by climate risks and global demand but are expected to trend downward as global supply stabilizes​.

Key Figures:

• Oil prices:
  • $84 per barrel in 2024, slightly up from $82.6 per barrel in 2023.
  • Gradual decline to $79 per barrel in 2025 and $78.1 per barrel in 2026​(GEP-June-2024).
• Non-energy index:
  • Expected to decrease slightly to 110.1 in 2024 from 110.2 in 2023​(GEP-June-2024).
• Energy index:
  • Forecast to decrease slightly from 106.9 in 2023 to 104.0 in 2024​(GEP-June-2024).

Summary of Commodity Price Outlook:

• Oil prices will remain elevated but are expected to gradually decline after 2024.
• Non-energy commodities like metals and agricultural products are projected to remain relatively stable, with some modest declines due to improved global supply and the energy transition.
• Risks from geopolitical events, climate change, and trade barriers could still cause volatility in key commodity markets.

Source: Global Economic Prospects June 2024 report