The situation remains fragile going into this year, he added.
In June 2023, he highlighted an ongoing global growth slowdown as a major concern to the Bank.
Asked for the latest analysis of this situation while providing an expert analysis of the global economic situation last week, Mr Kose answered that the slow down would continue.
“The third year in a row, we will see weaker growth in the global economy. Growth this year will be around 2.4%. It was 2.6% last year. For emerging market developing economies, growth is going to be a tad below, around 3.9%. And the third point is that external conditions are remaining very difficult for developing economies. Geopolitical tensions are on the rise. Financial stress is a possibility because of very high real interest rates,” he stressed.
“That means real rates will remain high. Trade is very weak. Last year, there was almost no growth in terms of global trade. So the situation remains fragile,” he stressed.
Mr Kose further intimated that this decade was supposed to be a transformative one.
By the end of 2030, he recounted, global community wanted to reach the sustainable development goals, eliminating extreme poverty, reducing greenhouse emissions by a half.
“Now, 2024 is the halfway mark when we think about this decade. And when you look at the growth for the half decade, we have been going through, this is going to be the weakest half decade growth since the early 1990s.
“When you look at how much growth we are expecting in emerging developing economies, it’s going to be a percentage point lower than what they delivered in the previous decade. In the context of low-income countries, fragile conflict states, a majority of them still having problems in terms of making progress in reducing poverty. In fact, 40% of them will see even lower per capita income by the end of this year than what they had prior to the pandemic.
“This is coming on top of very significant risks they have to deal with. I mentioned geopolitical tensions. We had Russian invasion of Ukraine. That’s still there. But now we have a conflict in the Middle East. Escalation of these conflicts could increase energy prices with serious implications for inflation and economic growth. Financial stress is a serious threat in an environment you have record-high real interest rates.
“Inflation could be persistent. And of course we have weaker than expected growth in China is a real possibility against the background of more frequent and more costly climate-related disasters. So all in all, it is a very difficult picture for development.”