Author: Tan KW | Publish date: Wed, 8 Jun 2016, 10:26 AM
KUALA LUMPUR (June 8): The World Bank has downgraded its 2016 global growth forecast to 2.4% from the 2.9% pace projected in January.
In a statement yesterday, the bank said the move was due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.
Its latest update of its Global Economic Prospects report said commodity-exporting emerging market and developing economies have struggled to adapt to lower prices for oil and other key commodities, and this accounts for 40% of the downward revision.
It said growth in these economies is projected to advance at a meager 0.4% pace this year, a downward revision of 1.2 percentage points from the January outlook.
World Bank group preident Kim Jim Yong said this sluggish growth underscores why it was critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty.
“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices,” he said.
The World Bank report said that commodity-importing emerging markets and developing economies have been more resilient than exporters, although the benefits of lower prices for energy and other commodities have been slow to materialise.
It said these economies were forecast to expand at a 5.8% rate in 2016, down modestly from the 5.9% pace estimated for 2015, as low energy prices and the modest recovery in advanced economies support economic activity.
Among major emerging market economies, China is forecast to grow at 6.7% in 2016 after 6.9%last year.
India’s robust economic expansion is expected to hold steady at 7.6%, while Brazil and Russia are projected to remain in deeper recessions than forecast in January.
Meanwhile, South Africa is forecast to grow at a 0.6% rate in 2016, 0.8 of a percentage point more slowly than the January forecast.
Elsewhere, growth in the East Asia and Pacific region is projected to slow to an unrevised 6.3% rate in 2016, with China’s expansion expected to ease to 6.7%, as projected in January.
The report said the region excluding China is projected to grow at 4.8% in 2016, unchanged from 2015.
It said this outlook assumes an orderly growth slowdown in China accompanied by steady progress on structural reforms and appropriate policy stimulus as needed.
It said growth in the rest of the region is expected to be supported by rising investment in several large economies (Indonesia, Malaysia, Thailand), and strong consumption supported by low commodity prices (Thailand, the Philippines, Vietnam).
http://www2.theedgemarkets.com/my/article/global-growth-forecast-revised-lower-24-2016-says-world-bank
In a statement yesterday, the bank said the move was due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.
Its latest update of its Global Economic Prospects report said commodity-exporting emerging market and developing economies have struggled to adapt to lower prices for oil and other key commodities, and this accounts for 40% of the downward revision.
It said growth in these economies is projected to advance at a meager 0.4% pace this year, a downward revision of 1.2 percentage points from the January outlook.
World Bank group preident Kim Jim Yong said this sluggish growth underscores why it was critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty.
“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices,” he said.
The World Bank report said that commodity-importing emerging markets and developing economies have been more resilient than exporters, although the benefits of lower prices for energy and other commodities have been slow to materialise.
It said these economies were forecast to expand at a 5.8% rate in 2016, down modestly from the 5.9% pace estimated for 2015, as low energy prices and the modest recovery in advanced economies support economic activity.
Among major emerging market economies, China is forecast to grow at 6.7% in 2016 after 6.9%last year.
India’s robust economic expansion is expected to hold steady at 7.6%, while Brazil and Russia are projected to remain in deeper recessions than forecast in January.
Meanwhile, South Africa is forecast to grow at a 0.6% rate in 2016, 0.8 of a percentage point more slowly than the January forecast.
Elsewhere, growth in the East Asia and Pacific region is projected to slow to an unrevised 6.3% rate in 2016, with China’s expansion expected to ease to 6.7%, as projected in January.
The report said the region excluding China is projected to grow at 4.8% in 2016, unchanged from 2015.
It said this outlook assumes an orderly growth slowdown in China accompanied by steady progress on structural reforms and appropriate policy stimulus as needed.
It said growth in the rest of the region is expected to be supported by rising investment in several large economies (Indonesia, Malaysia, Thailand), and strong consumption supported by low commodity prices (Thailand, the Philippines, Vietnam).
http://www2.theedgemarkets.com/my/article/global-growth-forecast-revised-lower-24-2016-says-world-bank
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