On June 6, in the latest Global Economic Prospects report, the World Bank (WB) forecast that the global gross domestic product (GDP) will grow by 6% this year, higher than with a forecast of 2,1% made in January 1,7.
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| IWB raises forecast for global economic growth in 2023. (Source: Postpressmag) |
The World Bank also lowered its global growth forecast for 2024 to 2,4%, from 2,7% in January 1. The reason is due to the effects of tight monetary policy, especially the decline in business investment and housing.
The report notes that global economic growth for the remainder of 2023 will slow significantly due to the prolonged and continuing effects of monetary tightening as well as constrained credit conditions. .
These factors are expected to continue to weigh on economic activity in 2024, driving global growth lower than previous projections.
The bank predicts that global economic growth will rebound to 3,0% by 2025.
U.S. economic growth in 2023 is now forecast at 1,1%, more than double the 0,5% rate given in January 1, while China's growth is expected to pick up. 2023%, higher than the previous forecast of 5,6%.
However, the World Bank also cut its 2024 economic growth forecast for the US to 0,8% and China to 4,6%.
Meanwhile, the Eurozone growth forecast for 2023 was raised to 0,4%, but the growth forecast for 2024 was also slightly cut.
According to the World Bank, recent tensions in the banking sector are contributing to tightening financial conditions that will continue into 2024.
One of the adverse scenarios presented by the organization is that tensions in the banking sector lead to a severe credit crunch, and financial markets in advanced economies are more affected.
If this happens, global economic growth will likely cut to just 1,3%, the slowest pace in 30 years, excluding the recessions of 2009 and 2020.
