World Bank says global economy stabilizing and other economics stories to read

In its latest Global Economic Prospects report, the World Bank has said that the global economy is expected to stabilize this year – for the first time in three years.

However, it comes at a level that is weaker than recent historical standards. Global growth is expected to be 2.6% in 2024, before moving up to an average of 2.7% from 2025-2026.

In the decade before the COVID-19 pandemic, growth averaged 3.1%.

"Four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying," said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President. "However, growth is at lower levels than before 2020."

The US Federal Reserve has left interest rates steady at 5.25%-5.50%. Fed Chair Jerome Powell said policymakers were happy to leave rates where they are until a clear economic signal is sent that something else is needed - likely a bigger decline in price pressures or rising unemployment.

"These dynamics can continue as long as they continue," Powell said. "We've got a good strong labour market. We think we've been making progress toward the price stability goal. We're asking ... is our policy stance about right? And we think yes, it's about right."

The central bank's policy statement acknowledged 'modest further progress' on inflation in recent months, but said rate cuts would not be appropriate without 'greater confidence' that price pressures will continue to ease.

Pakistan's finance minister has announced the government will set a budget deficit target of 6.9% of GDP in its fiscal year starting 1 July.

Retail inflation in India eased slightly in May, down to 4.75% year-on-year, compared to 4.83% in April.

UK GDP stayed flat in April, following a 0.4% month-on-month rise in March. Wet weather likely hit construction and retail.

German inflation increased in May, as a result of higher services prices. Consumer prices, harmonized with other European Union countries, rose 2.8% last month.

The World Bank has warned that poverty is more widespread in Myanmar than at any time in the past six years. Growth is unlikely to exceed 1% this fiscal year, either.

The US core consumer price index – which doesn't include food or energy – rose 3.4% year-on-year in May, its slowest pace in over three years.

Thailand's central bank has kept its key interest rate the same – sitting at 2.5%.

Argentine inflation cooled to 4.2% month-on-month in May, down from 8.8% in April. Inflation in the 12 months through May stood at 276.4%.

Japan's wholesale inflation increased in May at its fastest pace in nine months, rising 2.4% year-on-year.

Serbia has cut interest rates for the first time since 2020, reducing its key rate by 25 basis points to 6.25%.

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