
Global Economic Prospects
Setting the Stage to Accelerate Growth

The global economy is growing too slowly for lasting development. Even as the global economy stabilizes, emerging market and developing economies (EMDEs) are projected to have the weakest long-term growth outlook since the start of this century. Most low-income (LICs) countries are not on course to graduate to middle-income status by 2050. This topic page brings together the main policy messages from recent World Bank research on how policy makers can boost investment and growth. It primarily draws on the World Bank Global Economic Prospects reports. In addition to macroeconomic projections, these reports offer analysis and policy advice for countries to create favorable external environments, ensure macroeconomic stability, reduce structural constrains, tackle climate change, and boost long-term growth and development.
Although individual policy interventions play a role in improving the prospects for increased investment and growth, the research shows that what really makes a difference is a carefully sequenced, country-specific set of macroeconomic and structural policies. Meanwhile, at the global level, policies should focus on strengthening trade relationships, supporting green and digital transitions, delivering debt relief, and improving climate adaptation.
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Key Policy Messages
These are major themes and messages from the Global Economic Prospects reports and related macroeconomic research by the World Bank. Click on each card to learn more and access related publications.
Countries need to prioritize reforms to accelerate investment and deepen trade ties

Countries need to prioritize reforms to accelerate investment and deepen trade ties
Emerging market and developing economies can accelerate growth by adopting reforms to attract investment and deepen trade ties with other developing economies. To achieve this, countries must:
- Modernize infrastructure.
- Improve institutional quality and the business environment.
- Invest in human capital and protect the vulnerable.
- Deepen cross-border cooperation.
- Add buffers to maintain macroeconomic stability.
- Speed up the climate transition.
Public investment and sound fiscal policy are powerful ways to accelerate private investment and promote economic growth

Public investment and sound fiscal policy are powerful ways to accelerate private investment and promote economic growth
Since the global financial crisis in 2009, public investment growth in developing economies has halved. Scaling up public investment by 1% of GDP can increase the level of output by up to 1.6% over the medium term, provided countries have ample fiscal space and efficient public spending practices. To enhance economic prospects, countries should additionally:
- Cut deficits—global cooperation on debt relief is also needed.
- Enhance revenue mobilization by reforming tax administrations and enlarging tax bases.
- Adopt expenditure measures, such as reprioritizing spending and eliminating costly and inefficient subsidies.
Governments can use monetary policy to help stabilize prices and make it more attractive to invest

Governments can use monetary policy to help stabilize prices and make it more attractive to invest
Persistent inflation risks underscore the need for monetary policies to remain focused on price stability. Sound monetary policy can help create an environment in which investment is more likely to surge. Countries should:
- Communicate a steadfast commitment to price stability.
- Ensure central bank independence.
- Enhance financial supervision and strengthen macroprudential policies to mitigate financial stability risks.
Structural reforms can help lay the foundation for increased investment and growth

Structural reforms can help lay the foundation for increased investment and growth
Creating the conditions for a sustained expansion in investment and lasting improvements in longer-term growth hinges on success in implementing well-designed and comprehensive policy packages to foster stability, enhance resilience, and capitalize on their potential. Investment accelerations are often preceded or accompanied by structural reforms, such as:
- Reforms to promote trade, such as lowering tariffs.
- Easing restrictions on capital flows, while mitigating risks.
- Market-oriented reforms, e.g., reduced barriers to firm entry.
- Investing in assets such as infrastructure and human capital.
- Introducing carbon pricing and reducing fossil fuel subsidies.
Investment accelerations can help countries close development gaps and support inclusive growth

Investment accelerations can help countries close development gaps and support inclusive growth
Investment accelerations have tended to coincide with better development outcomes, including faster poverty reduction, lower inequality, and improved access to infrastructure. To make growth more inclusive, including by reducing food insecurity and gender gaps, governments should:
- Enhance financial support, broaden access to finance, and boost technical knowledge for farmers.
- Encourage investment in green technology/production.
- Invest in areas like childcare, safe transport, and job re-entry programs, and address restrictive social norms, to encourage female labor force participation.
Strong institutions are key to attracting investment

Strong institutions are key to attracting investment
In countries with better institutions (such as well-functioning and impartial legal systems) the likelihood of initiating an investment acceleration is higher than in those with weaker institutions. Policymakers can strengthen institutions by:
- Defining and protecting property rights.
- Increasing the independence of the judiciary and strengthening the rule of law.
- Bolstering contract enforcement.
- Improving and unifying regulatory and institutional structures.
- Increasing transparency.
Multimedia

Publications
Global Economic Prospects, January 2024
This edition of Global Economic Prospects projected that global growth would slow further in 2024 amid feeble international trade and investment, but argued that policy measures could make a big difference to the outlook at the country level. The January 2024 edition also contains analytical work on two special themes, including a focus on “investment accelerations” and on challenges faced by commodity-exporting countries.
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Events
The Global Economy in 2024: Turning a Corner?
To navigate this unsettled, difficult period, how can policymakers make their economies more resilient to shocks while implementing comprehensive structural reforms to boost long-term growth prospects? And can the global economy finally move past these overlapping crises to turn a corner? Watch a discussion of these issues based on the World Bank’s January 2024 Global Economic Prospects report. Event hosted by the Center for Global Development (CGD).
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Policy Research Working Papers
What Explains Global Inflation
This paper examines the drivers of fluctuations in global inflation, defined as a common factor across monthly headline consumer price index (CPI) inflation in G7 countries, over the past half-century.
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Policy Research Working Papers
Energy Price Shocks and Current Account Balances: Evidence from Emerging Market and Developing Economies
This paper investigates the effects of real energy price shocks on the current account balances of 45 emerging market and developing economies using country-specific structural vector autoregression models.
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Publications
International Dept Report 2023
The International Debt Report (IDR), formerly International Debt Statistics (IDS), is a longstanding annual publication of the World Bank featuring external debt statistics and analysis for the 121 low- and middle-income countries that report to the World Bank Debtor Reporting System (DRS).
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