Lanka to grow at 2.2% in 2024 – WB
The global economy is expected to stabilize for the first time in three years in 2024but at a level that is weak by recent historical standards.
Global growth is projected to hold steady at 2.6% in 2024 before edging up to an average of 2.7% in 2025-26. That is well below the 3.1% average in the decade before COVID-19 according to the World Bank’s latest Global Economic Prospects report.
The report commenting on Sri Lanka says from a minus 2.3% growth in 2023 will move up to be at 2.2% in 2024 and thereafter further climb to 2.5% in 2025 and to 3.0% in 2026.The forecast implies that over the course of 2024-26 countries that collectively account for more than 80% of the world’s population and global GDP would still be growing more slowly than they did in the decade before COVID-19.
This year, one in four developing economies is expected to remain poorer than it was on the eve of the pandemic in 2019. This proportion is twice as high for countries in fragile- and conflict-affected situations. Moreover, the income gap between developing economies and advanced economies is set to widen in nearly half of developing economies over 2020-24the highest share since the 1990s. Per capita income in these economies an important indicator of living standards is expected to grow by 3.0% on average through 2026, well below the average of 3.8% in the decade before COVID-19.
The report finds that public investment growth in developing economies has halved since the global financial crisis, dropping to an annual average of 5% in the past decade. Yet public investment can be a powerful policy lever. For developing economies with ample fiscal space and efficient government spending practices, scaling up public investment by 1% of GDP can increase the level of output by up to 1.6% over the medium term.
Global inflation is expected to moderate to 3.5% in 2024 and 2.9% in 2025, but the pace of decline is slower than was projected just six months ago.
“Although food and energy prices have moderated across the world, core inflation remains relatively high and could stay that way,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group.
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