Global Economic Prospects Report 2024 Key Highlights

Context

• The World Bank’s Global Economic Prospects report projects global growth to hold steady at 2.6% in 2024, with a slight increase to an average of 2.7% in 2025-26.
• This growth rate remains below the pre-COVID-19 decade’s average of 3.1%.

Key Highlights of Global Economic Prospects Report

Regional Growth Trends in South Asia

• Growth in the South Asia region is expected to decrease from 6.6% in 2023 to 6.2% in 2024, primarily due to a moderation of India’s growth from recent high levels.
• Despite this slowdown, regional growth is forecast to maintain a rate of 6.2% in 2025-26.
• Other economies in the region, like Bangladesh, Pakistan, and Sri Lanka, are expected to experience robust growth, though slower in Bangladesh compared to previous years.

India’s Growth Trend

• India is projected to remain the fastest-growing major economy with an expected steady growth rate of 6.7% over the next three years, including the current financial year.
• For fiscal year 2023/24, India’s growth is estimated at 8.2%, which is an increase of 1.9 percentage points from previous estimates made in January.

Investment and Consumption in India

• India’s investment growth is anticipated to slow down from its previous high levels but remain robust, bolstered by strong public and private investment.
• Private consumption in India is likely to benefit from a recovery in agricultural production and decreasing inflation rates.
• Government consumption in India is expected to grow slowly, aligning with efforts to reduce current expenditures relative to GDP

Global and Regional Inflation Trends

• Global inflation is projected to moderate to 3.5% in 2024 and further to 2.9% in 2025, although this decline is slower than previously expected.
• Central banks globally are likely to remain cautious about reducing policy interest rates, with global interest rates expected to average about 4% over 2025-26.
• In India, inflation has been within the Reserve Bank’s target range of 2 to 6% since September 2023.
• In other parts of the region, despite being below peak levels, inflation remains high due to persistent food price inflation and increased energy costs.

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