The World Bank report highlights a shift in global economic growth patterns, with non-resource countries poised to outpace their resource abundant counterparts. Non-resource abundant economies are projected to see growth increase from 2.4% in 2023 to 3.4% in 2024 and further accelerate to 4% by 2025-26. In contrast, resource-abundant countries are expected to see growth rise modestly from 2.2% in 2023 to 2.8% in 2024.
Source: Emerging Markets Business
A World Bank report highlights a pivotal shift in global economic growth patterns, projecting that non-resource abundant countries are set to outpace their resource-rich counterparts in the coming years. The report forecasts that growth in resource abundant countries will modestly increase from 2.2% in 2023 to 2.8% in 2024. In contrast, non-resource abundant countries are expected to see more robust growth, rising from 2.4% in 2023 to 3.4% in 2024, and further accelerating to 4% by 2025-26.
This divergence is primarily due to decreased reliance on the often volatile commodity markets and a strategic shift towards diversified economic activities in non-resource abundant nations. These countries have demonstrated greater economic resilience by investing heavily in human capital and technology, which fosters innovation and a more stable economic environment.
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Japan and Saudi Arabia Economies Driven By Resource Abundance
Japan, with its limited natural resources and high population density, has cultivated a resilient and diverse economy focused on manufacturing, technology, and human capital development. This strategic diversification has enabled Japan to maintain economic competitiveness and stability amidst global economic fluctuations.
Saudi Arabia, a country historically dependent on its vast oil reserves, has initiated significant changes under its "Saudi Vision 2030." This strategic plan, launched in 2016, aims to diversify the economy away from oil. As part of this vision, Saudi Arabia has substantially increased the assets under management by its Public Investment Fund, growing from under $150 billion at the start of Vision 2030 to over $700 billion by 2024. This shift marks a critical step towards reducing the kingdom's dependency on oil revenues and fostering economic sustainability.
World Bank Africa Growth Predictions
The report makes interesting economic growth predictions that are worth reviewing.
Economic growth in Sub-Saharan Africa is expected to increase to 3.4% this year, and 3.8% in 2025. This is after growth in Sub-Saharan Africa bottomed out at 2.6% in 2023.
The World Bank is predicting declining inflation which means that future “recovery is primarily driven by greater private consumption growth as declining inflation boosts the purchasing power of household incomes."
“The contribution of the global economy to Africa’s growth will remain modest. Expectations of monetary policy rate cuts in large global economies may stimulate investment growth in 2025... Investment growth will be subdued as interest rates are likely to remain high while fiscal consolidation constrains government consumption growth."
32 of 47 countries in Sub-Saharan Africa are expected to experience a growth acceleration in 2024—with eight of these 32 countries posting a rate of growth greater than 5% this year.
Niger, Senegal, São Tomé and Príncipe, Angola, and the Republic of Congo are among those expected to post growth rates exceeding 5%. However, some nations like Guinea, Zimbabwe, Mauritius, and the Democratic Republic of Congo are projected to experience decelerations in growth.
