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19 June, 2024
 
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Global economy faces worst 5-year period in 30 years

Geopolitical tensions threaten global growth, World Bank reports

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The World Bank projects a sluggish global economy from 2020 to 2025, marking the worst five-year period in the last three decades.

The latest report, "Global Economic Outlook," anticipates a continued slowdown, dropping to 2.4% in 2024 from 2.6% in 2023. Despite a marginal uptick to 2.7% in 2025, growth remains below the 2010s average.

Heightened geopolitical tensions pose short-term challenges, with potential impacts on energy prices and economic growth. The World Bank warns of a potential "decade of missed opportunities" without significant course correction.

Developing economies are expected to bear the brunt, with projections showing slower growth in North America, Europe, Central Asia, and Asia-Pacific due to China's deceleration.

Latin America and the Caribbean may see slight improvements, while the Middle East and Africa are expected to outperform.

However, developing economies face greater challenges in the medium term due to subdued global trade and tight financial conditions. The World Bank projects a modest 3.9% growth in 2024, falling significantly below the previous decade's average.

By year-end, approximately one in four developing countries and nearly 40% of low-income nations will remain poorer than pre-pandemic levels.

The World Bank emphasizes the world's failure to transform the 2020s into a "transformational" decade, addressing extreme poverty, infectious diseases, and climate change.

Yet, there remains an opportunity for reversal through swift government actions to boost investments and strengthen fiscal policies.

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