Global Economic Outlook
The early 2020s have experienced significant disruptions to the global economy, namely the Covid-19 pandemic and the Russia-Ukraine conflict. Now, additional challenges are emerging that further impact economic growth and stability.
World Bank's Economic Forecast
- Key Concerns: The World Bank highlights that increased trade barriers and policy uncertainty are contributing to a deteriorating global economic outlook.
- Revised Growth Estimates:
- The World Bank projects global growth to be 2.3% for the current year, a reduction of 40 basis points from earlier estimates.
- This performance is the weakest in 17 years, excluding global recession periods.
International Monetary Fund (IMF) Projections
- Global Growth Slowdown:
- The IMF estimates a global growth slowdown to 2.8% by 2025.
- Average global growth is expected to be 2.5% between 2020 and 2027, marking the slowest pace since the 1960s.
Impact on Developing Economies
- Deceleration Trend: Developing countries are witnessing a decline in economic growth from 5.9% in the 2000s to 3.7% in the 2020s.
Global Trade and Policy Uncertainty
- Trade Volume Growth: The World Bank expects global trade volume to grow by only 1.8% in 2025, a notable decrease of 1.3 percentage points from previous projections.
India's Economic Outlook
- Projected Growth:
- The World Bank forecasts India to grow at 6.3% in 2025-26.
- The IMF's April World Economic Outlook estimates India's growth at 6.2%.
- These projections are slightly below the Reserve Bank of India's projection of 6.5%.
- Future Growth Prospects: Expectations for a sharp growth increase in the near term are moderate, with a projected average growth of 6.6% over the next two years.
