World Bank warns of ‘decade of wasted opportunity’

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The global economy is dragging along at growth rates slower than previous decades, the World Bank said, as the post-pandemic rebound is weighed down by high interest rates, sluggish trade and geopolitical tensions that will hit developing countries hardest.

In the five years through 2024, global activity will post the weakest performance since the early 1990s, a “wretched milestone” that will leave one out of four developing economies poorer than before the COVID-19 pandemic, the Washington-based lender said Tuesday in its latest Global Economic Prospects report.

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“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” Indermit Gill, the bank’s chief economist, said in a statement. Such weak near-term growth will leave many of the poorest countries “with paralyzing levels of debt and tenuous access to food for nearly one out of every three people.”

Per-capita investment growth in developing economies over 2023-2024 will average 3.7 per cent, about half the average of the previous 20 years, without policies designed to boost investments and strengthen fiscal policies.

The World Bank sees global growth slowing in 2024 for a third year in a row to 2.4 per cent — down from 2.6 per cent last year and unchanged from its June forecast — before rising to 2.7 per cent in 2025, revised down 0.3 percentage points. Those rates compare with an average of 3.1 per cent during the 2010s.

Global growth for 2020-2024 is expected to hit 2.2 per cent, the slowest for a five-year period since 2.1 per cent in 1990-1994, according to the World Bank’s estimates.

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