The World Bank has released its latest Global Economic Prospects report, projecting global growth to stabilize at 2.6 percent in 2024, slightly up from an earlier forecast of 2.4 percent. This stabilization comes after years of disruptions caused by the pandemic and geopolitical conflicts.

Indermit Gill, the World Bank's Chief Economist, remarked that the global economy is steadying four years after being shaken by numerous upheavals, including inflation, monetary tightening, and conflicts in Ukraine and the Middle East. However, Gill cautioned that growth remains lower than pre-2020 levels, and the world's poorest economies continue to struggle under high debt and inflation pressures.

The Washington-based institution reiterated in its assessment that despite a slight improvement in outlook, significant risks persist. Flaring geopolitical tensions, particularly between the US and China, and potential commodity price shocks pose substantial threats to economic stability. Trade fragmentation and persistent inflation could further delay monetary easing globally.

According to the World Bank, advanced economies are growing at an annual rate of 1.5 percent, with output particularly sluggish in Europe and Japan. Emerging market and developing economies, led by China and Indonesia, are expanding at a rate of 4 percent. However, most economies are still growing more slowly than they did before COVID-19.

Inflationary pressures are expected to moderate to 3.5 percent in 2024 and 2.9 percent in 2025, but the decline is slower compared to previous projections. Ayhan Kose, the World Bank's Deputy Chief Economist, suggested that central banks' caution in lowering policy interest rates might remain, keeping global financial conditions tighter for longer and impeding growth in developing economies.

The report highlighted the dire situation in low-income economies, set to accelerate growth to 5 percent in 2024 from 3.8 percent in 2023. Nonetheless, forecasts for 2024 growth have been downgraded in three out of four low-income countries. The income gap between developing and advanced economies is widening, marking the highest disparity since the 1990s.

In particular, the Middle East and North Africa region's growth is expected to increase, driven by a gradual rise in oil production. Growth in Saudi Arabia is projected to be bolstered by non-oil activities and a resumption of oil activity in 2025. However, countries like Jordan, Tunisia, and Egypt face varied prospects, with some areas seeing sector-specific growth, such as tourism in Jordan, while others like Morocco might experience softer economic activity.

The World Bank stressed the need for decisive global and national policy actions to address these challenges. Structural policies aimed at raising productivity, improving infrastructure, and reducing public debt are critical for long-term growth. Additionally, securing trade, supporting green and digital transitions, and delivering debt relief are pivotal for sustained economic development.

With significant uncertainties on the horizon, including potential regional conflicts and climate change-induced natural disasters, the global economy's path to steady growth remains fraught with challenges. The effects of continued high interest rates and external geopolitical tensions will require meticulous management by policymakers worldwide.