Global economy set for weakest growth since pandemic, warns World Bank

The global economy is set to grow at its slowest pace since the pandemic, the World Bank has warned.

It has forecast growth of just 2.4% in 2024 and stated higher interest rates were a major factor.

Global trade and investment would continue to be stifled by conflicts in Ukraine and the Middle East, it said.

Outside of the pandemic, growth of 2.4% would be the weakest since the 2009-09 financial crisis.

It said the resilience of the US economy meant last year's growth was likely to come at 2.6%.

Indermit Gill, chief economist, at the World Bank Group said: "Near-term growth will remain weak, leaving many developing countries - especially the poorest - stuck in a trap".

Problems he explained include "paralyzing levels of debt and tenuous access to food for nearly one out of every three people."

Global growth is at historically "mediocre" levels and growth in global trade remains sluggish, he added.

The twice yearly lookahead warned that fallout from the Israel Hamas conflict "has sharply heightened geopolitical risks". It said the disruption to key shipping routes caused by attacks on vessels in the Red Sea increased the likelihood of "inflationary bottlenecks".

Political concern about rising prices was voiced by US Secretary of State Anthony Blinken on his ongoing tour to the region on Monday. He tweeted that the attacks "have disrupted or diverted nearly 20% of global shipping. This increases the cost and time of moving food, fuel, medicine, and humanitarian assistance."

It comes at a time when central banks around the world are beginning to feel that they are getting on top of the cost living crisis. Nearly two years of steady increases in the cost of borrowing have brought inflation closer of the 2% target in the US, UK