World Bank cuts global growth forecast on weak demand, commodity prices

A man is silhouetted against the logo of the World Bank at the main venue for the International Monetary Fund (IMF) and World Bank annual meeting in Tokyo October 10, 2012. REUTERS/Kim Kyung-Hoon

A man is silhouetted against the logo of the World Bank at the main venue for the International Monetary Fund (IMF) and World Bank annual meeting in Tokyo October 10, 2012.

http://in.reuters.com/article/worldbank-growth-idINKCN0YT2V2

The World Bank slashed its 2016 global growth forecast on Wednesday to 2.4 percent from the 2.9 percent estimated in January due to stubbornly low commodity prices, sluggish demand in advanced economies, weak trade and diminishing capital flows.

Commodity-exporting emerging market countries have struggled to adapt to lower prices for oil, metals, and other commodities, accounting for half of the downward revision, the multilateral lender said in its latest Global Economic Prospects report.

It expects these economies to grow at a meagre 0.4 percent pace this year, a downward revision of 1.2 percentage points from the January outlook.

Commodity-importing emerging market countries are faring better, but the benefits of lower energy and other goods have been slow to materialise, the World Bank said. It now expects growth in these countries will reach 5.8 percent, down a tenth of a percentage point from the January forecasts.

In the United States, a steep decline in energy sector investment and weaker exports will also shave eight tenths of a percentage point from the World Bank’s 2016 forecast, bringing growth to 1.9 percent.

The euro area saw a slight downgrade of its 2016 forecast to 1.6 percent, despite extraordinary monetary policy support and a boost from lower energy and commodity prices.

“As advanced economies struggle to gain traction, most economies in South and East Asia are growing solidly, as are commodity-importing emerging economies around the world,” said World Bank Chief Economist Kaushik Basu said in a statement.

However, he cautioned that the rapid rise of private debt in several emerging and developing economies posed a risk to growth should non-performing bank loans rise.

The downgraded World Bank forecast follows a similar move by the International Monetary Fund, which cut its growth forecasts two months ago.

———-

“The World Bank slashed its 2016 global growth forecast on Wednesday to 2.4 percent from the 2.9 percent estimated in January”

half a point is huge..

“However, he cautioned that the rapid rise of private debt in several emerging and developing economies posed a risk to growth should non-performing bank loans rise.”

not public debt?

401

~ by seeker401 on June 10, 2016.

One Response to “World Bank cuts global growth forecast on weak demand, commodity prices”

  1. “…sluggish demand in advanced economies, weak trade and diminishing capital flows.”
    At least they’re admitting “free” trade has killed consumers & the Main Street market. No adequate employment = no sales, very simple.
    As for their global growth forecast, sprinkle it in your garden and watch the flowers grow.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: