The developing world has cause for concern regarding its economic future in the coming period, as GDP growth is expected to slow in 2023, and per capita income is projected to decline in 2023-2024, according to the World Bank. 

The University of Jordan, in collaboration with the Jordan Strategy Forum (JSF) and The World Bank Group, held a panel discussion on Sunday to address global economic prospects and trends. 

Chief Economist and Senior Vice President for development economics at the World Bank Group, Indermit Gill, said that both the World Bank Group and the International Monetary Fund (IMF) are finding that the global economy is showing signs of recovery. However, both institutions predict that it will remain much weaker than the 2000-2019 period, Gill said.

“Things are not looking good for the developing world,” Gill added. 

Excluding China, GDP growth in emerging markets and developing economies is expected to slow from 3.8 per cent in 2022 to 2.7 per cent in 2023. Gill attributed the projected slowdown to weaker external demand, high inflation, currency depreciation and tighter financing conditions. 

“In 2023-2024, per capita income growth is projected to decrease by a full percentage point lower than the 2010-2019 average,” Gill added. 

International trade is also expected to grow at less than 2 per cent in 2023, which is about a third of the pace witnessed in the 2010-2019 period, he said.

“Global economic trends were doing great up until 2015,” Gill added. 

All developing countries devoid of conflict witnessed unprecedented poverty reduction from 1990 through 2015. Until 2010, the developing world witnessed revolutionary improvements in quality of life and economic growth, Gill said.

“Macroeconomic stability, private investments, international trade and social protection were the reasons behind the thriving in economic trends,” he added. 

According to the economist, the central banks of advanced economies are continuing to tighten their belts, but are signalling a slowdown in the pace of interest rate hikes. 

Countries in the Middle East in particular are urged to manage their debt and take strategic measures to increase economic growth, Gill said.

“Middle East and North Africa’s output growth is projected to fall sharply in 2023 and regain in 2024,” he added. 

China and India will be the major engines for global growth, Gill remarked. 

Meanwhile, Chief Economist for the MENA region, Roberta Gatti, said that economies in the MENA region grew the fastest over the past seven years. 

Oil-exporting countries “did very well” during that period due to high demand and high prices of oil. However, the rest of the countries in the region, and Jordan among them, have “had a tougher time” due to increases in oil and food prices, she added.

“The key concern is inflation; it plays out very differently in the MENA region,” Gatti said.