There is global economic resilience – World Bank Deputy Chief Economist

The World Bank Deputy Chief Economist, Ayhan Kose, has said the global economy has been remarkably resilient, especially in the last year.

Growth last year, he said, surprised on the upside, thanks to the US economy, the strength of the US economy. But, he further noted, some large emerging markets like India, Indonesia, Brazil, Mexico, delivered robust growth rates.

Inflation has been coming down without a major slowdown, Mr Kose further indicated.

“Interest rates went up significantly, but we did not see a major financial crisis in a large economy. So all in all, there is resilience, and we should be happy about it. Having said that, you know, there are not so good news as well,” he said while providing an expert analysis on the global economic situation last week.

In June 2023, he mentioned an ongoing global growth slowdown as a major concern to the Bank.

Asked for the latest analysis of this situation, Mr Kose answered that the slow down would continue.

“The third year in a row, we will see weaker growth in the global economy. Growth this year will be around 2.4%. It was 2.6% last year. For emerging market developing economies, growth is going to be a tad below, around 3.9%. And the third point is that external conditions are remaining very difficult for developing economies. Geopolitical tensions are on the rise. Financial stress is a possibility because of very high real interest rates,” he stressed.

Inflation, he said, is going to continue coming down, but not to the levels central banks are comfortable with, at least in this year.

“That means real rates will remain high. Trade is very weak. Last year, there was almost no growth in terms of global trade. So the situation remains fragile,” he said.

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