World Bank slashes global growth forecast to 2.4%

OECD signals growth stabilisation

Washington, June 8: A worried World Bank slashed its growth forecast for the global economy on Tuesday, saying advanced economies are rebounding more slowly than expected and low commodity prices continue to hurt other countries.

The Bank said that the global economy should grow at just 2.4% this year, the same lethargic pace of 2015 and much slower than the 2.9% it predicted in January. It said that the slow growth in advanced economies is holding back developed countries, with world trade and investment both depressed, and called for.

Prospects for a pickup “remain muted,” the Bank said, in a report especially downbeat for countries dependent on commodity exports like oil.

It said risks to growth have risen since the beginning of the year, particularly the high level of borrowing by companies in developing countries,

June 8: Signs are emerging that a downturn in the United States and China, the world’s two biggest economies, may have bottomed out, the OECD’s monthly leading indicator showed on Wednesday. The Paris-based Organisation for Economic Cooperation and Development said its leading indicator (CLI) for the United States improved to 98.95 in April from 98.93 in March, the first increase in the reading since July 2014. The indicator, meant to flag early signals of turning points in economic activity, remained below the long-term average of 100, however. The index for China rose to 98.41 in April from 98.38 in March, its second consecutive monthly increase. The reading fell below the 100 mark in October 2014. The OECD said its indicators showed stable growth momentum in the euro zone as a whole, including Germany and France, while the reading for Britain pointed to easing growth. The index for the euro zone fell to 100.38 in April from 100.42 in March but has been above its long-term average of 100 since October 2013. Reuters which has left them vulnerable to credit crises as growth stagnates.

It also includes the rise in doubts that the aggressive monetary easing in developed countries, with negative interest rates in several, is doing the intended job of firing up economic activity.

“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices,” said World Bank Group president Jim Yong Kim.AAgencies