India to remain fastest growing large economy in 2024 as well: World Bank report

India will continue to be the world's fastest-growing major economy, even as the global economy is expected to stabilise for the first time in three years in 2024, although at a comparatively weaker level by recent records, according to the World Bank’s latest Global Economic Prospects report.

The Indian economy, however, has been projected to grow at a much slower pace of 6.6 per cent this year, against the 8.2 per cent growth recorded in 2023. 

With strong domestic demand and a surge in investment, India's growth will make South Asia as a whole the fastest-growing region, the World Bank stated in the report.

The report projects global economic growth to stabilise around 2.6 per cent in 2024, reversing the declining trend of the past three years – in what is seen as a “soft landing." 

But overall risks facing the world's economy are tilted toward the negative.

The East Asia and Pacific region, comprising China, South Korea, ASEAN nations and Pacific island nations, is projected to grow at a slower rate of 4 per cent in 2024 down from 4.2 per cent in 2023. 

China's economy is projected to remain in the slow lane, with growth projected to drop to 4.8 per cent from 5.2 per cent. This has been attributed to the continuing slump in the country’s property sector, weak retail sales and poor business sentiment.

This, according to the World Bank report, could, in a worst scenario, scare investors and hurt policy decisions. It could also cause volatility global commodity prices 

Vietnam and Indonesia are expected to record strong growth rates of 5 and 5.5 per cent, respectively.

The Japanese economy is projected to continue its sluggish growth with an expected expansion of 0.7 per cent in 2024, down from 1.9 per cent in 2023. 

The coming presidential elections, according to the report, could prove a spoiler with its potential to escalate geopolitical and trade tensions. Some US companies have already shifted operations away from China and this trend could accelerate if trade tensions persist, the report pointed out.

The US economy is projected to remain steady at 2.5 per cent for the second year in a row in 2024, with chance of stronger than expected growth. 

The report projects global inflation moderating to 3.5 per cent in 2024 and 2.9 per cent in 2025, but at a slower rate than earlier projected.

In effect, the pivot of global economic growth could shift from China to the United States with its upside potential against China’s economic downturn.

The World Bank report projects economic growth in Europe and Central Asia to edge down to 3.0 per cent in 2024 before moderating to 2.9 per cent in 2025. 

Growth in Latin America and the Caribbean is expected to decline to 1.8 per cent in 2024 before rising to 2.7 per cent in 2025. 

Growth in the Middle East and North Africa is expected to pick up to 2.8 per cent in 2024 and 4.2 per cent in 2025, while Sub-Saharan Africa is expected to record higher growth of 3.5 per cent in 2024 and 3.9 per cent in 2025.