São Paulo – The World Bank has revised down its growth estimate for developing countries this year. According to the Global Economic Prospects (GEP) report, issued this Tuesday (10th), the combined growth rate should be 4.8%. In January, the forecast rate was 5.3%.
According to a statement from the bank, the poor performance of the world economy in Q1 has “delayed” an expected pickup of growth. Contributing factors include bad weather in the United States, the crisis in Ukraine, a rebalancing process in China, political unrest in several medium-income countries, slow structural reforms and other constraints.
In the long term, however, the prospects are more optimistic. The bank believes developing economies will be up 5.4% in 2015 and 5.5% in 2016. “It is a good rate, though not sufficiently strong to meet the target of reducing poverty to 3% by 2030, therefore additional efforts are needed in order to conduct structural reforms and obtain somewhat stronger growth,” said Andrew Burns, the survey’s main author, in a statement on the Ibrd website.
To Ibrd president Jim Yong Kim, growth rates in the developing world remain far too modest to create the kind of jobs we need to improve the lives of the poorest 40%.” Like Burns, he said countries must “invest more” in structural reforms.
Conversely, growth in developed economies is expected to pick up. According to the bank, said countries should grow by 1.9% this year, 2.4% in 2015 and 2.5% in 20016. It is worth noting that the United States and Europe are recovering from a long period of crisis. The Ibrd believes rich countries will account for over half of the world’s growth in the next two years, as against a rate lower than 40% in 2013.
“The acceleration in high-income countries will be an important impetus for developing countries,” the bank’s press statement reads. Developed countries should contribute US$ 6.3 trillion to global demand in the coming three years, as against US$ 3.9 trillion in the past three years.
The report estimates overall global growth to be 2.8% this year. The forecast is 3.4% for 2015 and 3.5% for 2016.
The economies of Latin America and the Caribbean are expected to grow by 1.9% in 2014, 2.9% in 2015 and 3.5% in 2016. The estimate for the Middle East and North Africa is also 1.9% this year, 3.6% in 2015 and 3.5% in 2016.
*Translated by Gabriel Pomerancblum
