World Bank Cuts Global GDP to 2.4%, Thailand’s Downgraded to 3.2% over Slow Recovery in China

The World Bank sees 2024 Global GDP growth at 2.4%, compared to the 2.6% forecast last year, marking the downtrend for three years straight. As for last June’s projections, the forecast for 2023 has been revised up by 0.5 percentage point, mainly reflecting the strength of the US economy, whereas that for 2024 is unchanged, with a sizable upgrade to US growth accompanied by a downward revision to euro area activity.

Meanwhile, the World Bank also lowered the 2025 Global GDP growth, estimated to 2.7% from 3% earlier, as inflation continues to soften, interest rates decline, and trade growth firms.


Emerging Market and Developing Economy (EMDE) growth is projected to remain unchanged at about 3.9% a year through 2024-25, with growth in China set to slow while that in other EMDEs picks up. A modest firming of export and investment growth are expected to support EMDE growth, but the growth is still expected to be weaker than its average pace for the last 20 years.


The forecast for global growth over 2024-25, about an average of 2.5% a year, is 0.6 percentage point below the 2010-19 average rate, partly reflecting the persisting effects of the pandemic, the invasion of Ukraine, the sharp increase in inflation, the associated tightening of global financial conditions, and the weakening of trade growth.


The recent conflict in the Middle East has sharply heightened geopolitical risks, as intensification of these conflicts or increasing geopolitical tensions elsewhere could have negative effects through commodity and financial markets, trade, and confidence.

Recent attacks on commercial vessels and oil tankers in the Red Sea have already started to disrupt key shipping routes, eroding slack in supply networks and increasing the likelihood of inflationary bottlenecks. Energy supplies are at risk of being substantially disrupted, which could lead to a spike in energy prices. This would have significant spillovers to other commodity prices and heighten uncertainty among geopolitics and economies, which lead to the possibility of slowed investment and further weakening of growth.


Meanwhile, Thailand GDP was revised down -0.4 percentage points and -0.3 percentage points for 2024 and 2025, respectively, to 3.2% and 3.1% as monetary policy actions across East Asia and Pacific (EAP) diverged somewhat in the second half of 2023. Interest rates rose further in Indonesia, the Philippines, and Thailand, reflecting varying factors including currency depreciation in the face of US dollar strength, inflationary pressures and, in the case of Thailand, policy normalization following a period of low interest rates. 

Weaker discretionary household spending in China, including the lower demand for international travel, would also affect some countries in the region, causing the tourism recovery in some of the region’s economies, including Cambodia and Thailand, to contract. Rising global tensions and trade protectionism could also dampen trade growth, with adverse effects on domestic activity.