Mubasher: The World Bank trimmed its global growth forecasts for the third straight year.
The leading international development institution downgraded its forecast for global growth in 2016 by 0.4% to 2.9% which is up slightly from last year’s downward-revised growth rate of 2.6%.
The downgrade came on the deeper contractions than expected in Brazil and Russia and weaker output in most of the world’s biggest economies, including the U.S. and China.
The World Bank cut its forecasts for developing countries in general for the year by more than 0.5% to 4.8%. That forecast rests on a smooth Chinese slowdown, stabilization in commodity prices and a gradual increase in borrowing costs.
Last year’s plunge in world commodity prices and an accelerating economic slowdown in China are highlighting fundamental weaknesses in developing economies reliant on exports and cheap debt to fuel growth
Not since the 1980s has growth in major developing economies slowed for three consecutive years, the bank said.
The World Bank also said U.S. gross domestic product would expand 2.7% in 2016, a rate of growth slightly higher than last year’s 2.5%, though 0.2% point lower than the bank’s previous forecast. It also cut its outlook slightly for China to 6.7%, the slowest growth rate since 1990.
