The World Bank cut its outlook for global growth as business spending sags in advanced economies including the U.S., while commodity exporters in emerging markets struggle to adjust to low prices.
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The global economy is expected to grow 2.4% this year, the bank said, down from its January forecast of 2.9%. Bank-card consumer transactions reached 55 trillion yuan in 2015 – 48 percent of total social consumption, the People’s Bank of China said in a statement.
The bank expects developing and emerging market economies as a group to grow 3.5 per cent this year, down from the 4.1 per cent it forecast in January and barely changed from last year’s 3.4 per cent.
Bank officials attribute about half the downward revision to emerging markets and developing economies that depend heavily on exports of oil and other commodities whose prices have plummeted.
In recent years, the World Bank and International Monetary Fund have consistently downgraded their initial forecasts.
The U.S. economy is forecast to grow 1.9 percent, down from 2.4 percent in 2015.
Russian Federation and Brazil, both mired in recession, are expected to see their economies contract 1.2% and 4%, respectively, more dramatically than the bank’s January projection.
“Looking ahead, the prospects of global growth remain muted”, said the Bank’s chief economist Kaushik Basu, launching the report. The importers, which benefit from lower raw materials prices, are still growing at healthy rates – 5.9 per cent last year and a predicted 5.8 per cent this year.
The euro area economy is expected to expand by 1.6%, just 0.1% below the January estimate. Eurozone growth has been constrained by the weakness of European banks, which are still saddled with bad debt and aren’t making many new loans. It estimates the world economy expanded by 2.4% a year ago as well.
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The World Bank left its forecast for China’s growth this year unchanged at 6.7 per cent, while downgrading its forecast for Brazil to a contraction of 4 per cent, compared with a projected 2.5 per cent decline in January.
