The World Bank’s latest report, Global Economic Prospects, does not paint a rosy picture of economic growth for the global economy. Global growth rate is expected to slow down to 2.4%. This will be the third consecutive year of deceleration. Global growth is going to be the weakest in terms of half-decade performances in 30 years. The emerging market and developing economies will continue to be on a lower trajectory as compared to the pre-pandemic numbers. The advanced economies and China will be growing below their average paces of 2010-2019. Progress in closing the gap in per capita incomes between the rich AEs and the middle-income EMDEs will be limited. Many fragile EMDEs may fall further behind. As far as the low-income countries are concerned, it is expected that one-third of them will remain below the per capita income achieved in 2019; about 60% of the LICs are fragile and conflict-affected. The predicted growth rates for the AEs is 1.2%, with the United States of America expected to grow the fastest at 1.6%; the euro zone and Japan would be lagging behind at 0.7% and 0.9%, respectively. China would be growing very slowly compared to its earlier pace — at 4.5%. However, India has retained an impressive position by being the fastest-growing large economy at 6.4%.

The World Bank has indicated many constraints that can pull down growth. Inflationary pressures have led to a tightening of monetary policy, resulting in high real rates of interest. Oil-price volatility may spoil the show further. Having emerged as the two most important economies of the world, China and the US would have to function well to pull up the rest of the world and accelerate investment and trade. But geopolitical tensions are another set of constraints that can upset a steady pattern of growth. In short, headwinds from a number of directions might make a bad situation worse for global growth. Stable growth requires disciplined monetary and fiscal policies. The more the unanticipated turmoil, the greater the use of discretionary policies to stabilise the economy. An exclusive focus on changes in the rate of aggregate growth in the economy may be suggestive of an economy’s resilience. Yet, impressive macroeconomic growth rates can conceal problems of steep inequalities in income, high rates of unemployment, persistent poverty and environmental degradation. The quality of the economy — national or global — may not be adequately captured by growth rates.