World Economic Outlook, April 2024: Steady but Slow: Resilience amid Divergence
World Economic Outlook, April 2024
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- Published: April 16, 2024
Global outlook and key statistics
- Baseline forecast: world economy to grow at 3.2 percent during 2024 and 2025, the same pace as in 2023.
- Advanced economies growth: rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025.
- Emerging market and developing economies growth: slowdown from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025.
- Global growth five years from now: forecast at 3.1 percent (noted as the lowest in decades).
- Global inflation: decline from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025.
- Advanced economies expected to return to inflation targets sooner than emerging market and developing economies.
- Core inflation: generally projected to decline more gradually.
Inflation, monetary policy, and resilience
- Economic activity was surprisingly resilient through the global disinflation of 2022–23 despite significant central bank interest rate hikes to restore price stability.
- With inflationary pressures abating more swiftly than expected in many countries, risks to the global outlook are described as broadly balanced compared with last year.
- Monetary policy guidance: ensure that inflation "touches down smoothly."
Chapter 2 — Housing markets and transmission of monetary policy
- Monetary policy effects through mortgage and housing markets are stronger where:
- fixed-rate mortgages are not common;
- home buyers are more leveraged;
- household debt is high;
- housing supply is restricted;
- house prices are overvalued.
- These characteristics vary significantly across countries, explaining why monetary policy is strong in some countries and weak in others.
- Recent shifts in mortgage and housing markets may have limited the drag of higher policy rates up to now in several countries.
- Policy risk note: the risk that households may still "feel the pinch" should be taken seriously where fixed-rate mortgages have short fixation periods, especially if households are heavily indebted.
Chapter 3 — Medium-term growth slowdown and drivers
- Key finding: significant and widespread slowdown in total factor productivity is a major driver of the growth decline.
- Contributing factors:
- increased misallocation of capital and labor between firms within sectors;
- demographic pressures;
- slowdown in private capital formation.
- Projection: absent policy action or technological advances, medium-term growth is projected to fall well below prepandemic levels.
- Measures to bolster growth recommended:
- improve resource allocation to productive firms;
- boost labor force participation;
- leverage artificial intelligence for productivity gains.
- Additional constraints cited: high public debt and geoeconomic fragmentation may impose further limits on future growth.
Chapter 4 — Spillovers from G20 emerging markets
- G20 emerging markets account for almost one-third of world GDP and about one-quarter of global trade.
- Since 2000, spillovers from shocks in G20 emerging markets—particularly China—have increased and are now comparable in size to those from shocks in advanced economies.
- Trade, notably through global value chains, is highlighted as a key propagation channel.
- Spillovers generate a reallocation of economic activity across firms and sectors in other countries.
- Scenario: a plausible growth acceleration in G20 emerging markets, even excluding China, could support global growth over the medium term and spill over to other countries.
- Policy guidance for recipient economies: maintain sufficient buffers and strengthen policy frameworks to manage the possibility of larger shocks from G20 emerging markets.
Cross-cutting policy recommendations and priorities
- Renewed focus on fiscal consolidation to rebuild room for budgetary maneuver and priority investments, and to ensure debt sustainability.
- Intensify supply-enhancing reforms to increase growth toward the higher prepandemic era average and accelerate income convergence.
- Multilateral cooperation is needed to:
- limit the costs and risks of geoeconomic fragmentation and climate change;
- speed the transition to green energy;
- facilitate debt restructuring.
World Economic Outlook, April 2024: Steady but Slow: Resilience amid Divergence
Content in this bundle
- Chapter 1
- Chapter 1 Online Annex
- Chapter 2
- Chapter 2 Online Annex
- CHAPTER 3 SLOWDOWN IN gLObaL MEDIUM-TERM gROWTH: WHaT WILL IT TaKE TO TURN THE TIDE?
- Chapter 3 Online Annex
- ch4: TRaDINg PLaCES: REaL SPILLOvERS FROM g20 EMERgINg MaRKETS
- Chapter 4 Online Annex
- Commodity Special Feature
- Executive Summary
- Foreword
- Statistical Appendix
- Table a
- Table b
- Full Report