WB raises global GDP growth forecast, good news for the US

On June 6, in its latest Global Economic Prospects report, the World Bank (WB) forecast that global gross domestic product (GDP) will grow by 2.1% this year, higher than the 1.7% forecast given in January 2023.

IWB raises global economic growth forecast for 2023. (Source: Postpressmag)

The World Bank also reduced its global growth forecast for 2024 to 2.4%, from 2.7% in January 2023. The reason is due to the impacts of tight monetary policy, especially the decline in business and housing investment.

The report notes that global economic growth will slow significantly over the remainder of 2023 due to the prolonged and persistent effects of tight monetary policy and restrictive credit conditions.

These factors are expected to continue to weigh on economic activity in 2024, causing global growth to be lower than previously forecast.

The bank predicts global economic growth will recover to 3.0% by 2025.

US economic growth in 2023 is now forecast at 1.1%, more than double the 0.5% forecast in January 2023, while China's growth is expected to increase by 5.6%, higher than the 4.3% forecast previously.

However, the World Bank also cut its 2024 economic growth forecast for the US to 0.8% and for China to 4.6%.

Meanwhile, the Eurozone's 2023 growth forecast was raised to 0.4%, but the growth forecast for 2024 was also cut slightly.

Recent strains in the banking sector are contributing to tighter financial conditions that will persist through 2024, according to the World Bank.

One of the downside scenarios the organization outlined is that stress in the banking sector leads to a severe credit crunch and financial markets in advanced economies are more severely affected.

If that happens, global economic growth would likely fall to just 1.3%, the slowest pace in 30 years, excluding the recessions of 2009 and 2020.

Source: https://baoquocte.vn/wb-nang-du-bao-tang-truong-gdp-toan-cau-bao-tin-vui-voi-my-229999.html