World Bank forecasts brighter global economy, warns of risks ahead

The global economy is showing signs of improvement, with the United States leading the way, according to the latest forecast from the World Bank. Global growth is expected to reach 2.6 percent this year, up from a previous forecast of 2.4 percent, thanks to the resilience of the U.S. economy.

Despite challenges such as high interest rates and geopolitical tensions, the U.S. economy is expected to grow at a rate of 2.5 percent, higher than previously predicted. The World Bank credited “U.S. dynamism” for helping stabilize the global economy, with strong job growth and lower inflation contributing to the positive outlook.

However, the bank warned that central banks, including the Federal Reserve, may be slow to reverse interest rate increases, which could impact global growth rates. Global trade is also a concern, with trade restrictions on the rise and the risk of protectionism becoming a drag on the global economy.

Developing countries, in particular, are at risk of a debt crisis if interest rates remain high for an extended period. Many of these countries borrowed heavily during the pandemic and are now facing challenges such as rising food and fertilizer prices.

Overall, while the global economy is in better shape than earlier in the year, there are still risks that could impact growth in the future. It will be important for policymakers to carefully navigate these challenges to ensure continued economic stability and growth.