Financial and Monetary Systems

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

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The World Bank expects global growth to stabilize. Image: Photo by Patrick Tomasso on Unsplash

Joe Myers
Writer, Forum Agenda
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  • This weekly round-up brings you the latest news from the world of economics and finance.
  • Top economy stories: World Bank says global economy is stabilizing; US Federal Reserve holds rates; German inflation increases in May.

1. World Bank says global economy is stabilizing

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."

Contributions to global economic growth
Contributions to growth. Image: World Bank

2. US Federal Reserve leaves rates steady

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.

US inflation and interest rates
US inflation and interest rates. Image: Reuters

3. News in brief: Stories on the economy from around the world

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.

India's retail inflation eases slightly in May
India's retail inflation. Image: Reuters

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%.

4. More on finance and the economy from Agenda

As highlighted by this year’s Global Gender Gap Report, the hiring rate of women into leadership roles continues to decline. Here’s why we need sustained and systematic efforts to get women into leadership roles in an AI-driven workplace.

Asia-Pacific is expected to be the fastest-growing region in the global economy, but it faces the challenge of balancing economic growth with tackling climate change. Here’s how prioritizing a green economy can help the region.

An estimated $75 trillion is required to reach net zero by 2050, but high interest rates pose a challenge. This article explores what impact higher interest rates have on investment in the energy transition and the levels policy-makers can pull.

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Related topics:
Financial and Monetary SystemsGeo-Economics and Politics
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Contents
1. World Bank says global economy is stabilizing2. US Federal Reserve leaves rates steady3. News in brief: Stories on the economy from around the world4. More on finance and the economy from Agenda

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