The global economy is set to grow at its slowest pace since the pandemic, according to a new warning from The World Bank.
It has forecast growth of only 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%.
Announcing the findings, 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, added Gill.
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 and Eurozone and rates cuts are widely expected this year.
Responding to the findings, Jason Kurtz, CEO, Basware said, “Against the backdrop of weaker economic growth and higher interest rates, businesses will come under increasing pressure to do more with less.
Key to this effort must be a renewed focus on optimising core business functions to curb inflation, interest rates and improve supply chains. Far too many companies still have outdated, manual systems in place, even in key areas like finance and accounts payable.”
“Forward-thinking businesses will need to look again at the key role that AI and automation can play in empowering leaner and more effective processes, delivering substantial savings in the long term,” added Kurtz.