The World Bank lowered Romania’s economic growth forecasts to 1.8% in 2023 and to 3.3% in 2024, according to the World Bank’s latest January 2024 Global Economic Prospects report.

The document also shows that the global economy is on track for its worst half-decade growth in 30 years.

Global growth will slow for the third straight year in 2024 to 2.4% from 2.6% in 2023, according to the financial institution’s latest Global Economic Outlook report.

Growth will pick up slightly to 2.7% in 2025, although the acceleration over the five-year period will remain almost three-quarters of a percentage point below the average rate of the 2010s.

And while the global economy has proved resilient to recessionary risks in 2023, heightened geopolitical tensions will pose new challenges in the near term, the World Bank said, with most economies expected to grow more slowly in 2024 and 2025 than in the previous decade. .

“We have a war in Eastern Europe, a Russian invasion of Ukraine. We have a serious conflict in the Middle East. An escalation of these conflicts could have significant consequences for energy prices, which could affect inflation as well as economic growth,” Ayhan Kose, deputy chief economist at the World Bank and director of the Prospects Group, told CNBC’s Silvia Amaro.

The bank warned that without a “substantial course correction”, the 2020s will be considered “a decade of lost opportunities”.

Developing economies were the most affected

Regionally, economic growth is expected to weaken the most this year in North America, Europe, Central Asia and the Asia-Pacific region, mainly due to a slowdown in China.

Latin America and the Caribbean are forecast to improve slightly from a low base, while the Middle East and Africa are expected to grow more significantly.

However, in the medium term, emerging economies will suffer the most, as weak global trade and tight financial conditions significantly dampen growth.

“Short-term growth will remain weak, leaving many developing countries — especially the poorest — trapped: with huge levels of debt and poor access to food for nearly one in three people,” Gill said.

Developing economies are expected to grow by just 3.9% in 2024, more than one percentage point below the average of the previous decade.

By the end of the year, people in about one in four developing countries and about 40 percent of low-income countries will remain poorer than they were before the Covid-19 pandemic in 2019, the financial institution said.

The bank said the data shows the world is falling short of its goal of making the 2020s a “decade of transformation” in the fight against extreme poverty, major infectious diseases and climate change.

However, he added that there is scope to reverse the trend if governments act quickly to increase investment and strengthen the fiscal policy framework.

“Investment booms can transform emerging economies and help them accelerate the energy transition and achieve a range of development goals,” Coase said in a report to next week’s World Economic Forum, where international business and policy leaders are gathering to discuss global policy. economy and social issues.

“To trigger such booms, developing economies must implement comprehensive policy packages to improve fiscal and monetary systems, expand cross-border trade and financial flows, improve the investment climate, and strengthen the quality of institutions. It’s hard work, but many developing countries have done it before. Again, this will help moderate the expected slowdown in potential growth towards the end of this decade,” he continued.