The World Bank reduced its 2016 economic growth forecast from 2.9% in January to 2.4% (Reuters). Economists continue to remain pessimistic about low commodity prices in developing countries, weak growth in advanced economies and political uncertainty around the world (AP; WSJ). The World Bank is fearful of the future state of the global economy because of weak currencies, protectionist policies surrounding trade and price declines in the energy and metal sectors (Reuters). On a brighter note, South and East Asia, as well as commodity importing nations are faring quite well and experiencing positive growth (Reuters).
On a per region basis, the World Bank expects Latin America’s economy to shrink by 1.3% in 2016 due to political unrest in Brazil and falling commodity prices (AP; US News). Oil prices are expected to negatively impact Russia’s economy, while providing growth opportunities for India (7.8%), Pakistan (5.5%) and Bangladesh (6.7%) (US News). The World Bank predicts that the Eurozone, in the midst of controversy over the exit of Britain, will continue to grow at a sluggish 1.6% due to weak banks and bad debt (AP). Although growth appears bleak for most of the world’s economies, commodity stabilization and China’s sustainable growth efforts may create opportunity for trade and economic development (US News). The World Bank and International Monetary Fund typically hold a more optimistic view of the global economy; therefore, declines in economic growth forecasts are not uncommon (US News).
Tags: Global Economy, World Bank, Field, growth forecast, International Monetary Fund