The global economy is at risk of a “wasted” decade and the weakest stretch of growth in 30 years, the World Bank warned on Tuesday, saying a sluggish recovery from the pandemic and crippling wars in Ukraine and West Asia are expected to weigh heavily on output.

In its semiannual Global Economic Prospects report, the World Bank projected that the growth in world output will slow further in 2024, declining to 2.4 per cent from 2.6 per cent. Although the global economy has been surprisingly resilient, the report warned that its forecasts were subject to heightened uncertainty because of the two wars, a diminished Chinese economy and the increasing risks of natural disasters caused by global warming.

The converging crises in recent years have put the world economy on track for the weakest half-decade in 30 years.

“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” said Indermit Gill, the World Bank Group’s chief economist.

Global growth is projected to slow for the third straight year in 2024. Developing countries are bearing the brunt of the slowdown, with high borrowing costs and anemic trade volumes weighing on their economies.

Although policymakers have made progress in bringing inflation down from its 2022 high, the war in the Gaza Strip between Israel and Hamas is threatening to become a broader conflict that could spur a new bout of price increases.

“The recent conflict in West Asia, coming on top of the Russian Federation’s invasion of Ukraine, has heightened geopolitical risks,” the report said. “Conflict escalation could lead to surging energy prices, with broader implications for global activity and inflation.” The recent attacks in the Red Sea by the Houthi militia have already affected global commerce.

New York Times News Service