The entity cut its global growth forecast for 2024 to 2.4% from 2.7% in January, citing the continued effects of a tightening monetary policy, especially in the reduction of business and residential investment.
“Growth through the remainder of 2023 will slow substantially, weighed down by the lagged and current effects of monetary tightening and tighter credit conditions,” it said. “These factors are expected to continue to affect activity in the coming year, leaving global growth below previous forecasts.”
The bank forecast a rebound in global growth to 3% in 2025.
In January, the World Bank had warned that global GDP was slowing to the brink of recession, but since then, the strength of the US labor market and consumption have exceeded expectations, as has the Chinese recovery. after the confinements by the COVID-19.
US growth for 2023 is now forecast at 1.1%, more than double the 0.5% forecast in January, while China’s would increase to 5.6%, up from 4.3% forecast in January and compared to 3% in 2022. .
However, the bank halved its previous growth forecast for the United States in 2024, to 0.8%, and cut China’s by 0.4 percentage points, to 4.6%. The euro zone saw its growth forecast increased to 0.4% in 2023, compared to January’s flat outlook, but the forecast for next year was also slightly lowered.