WB sees ‘flat’ growth for developing countries

AS GT A The orld ank lowered its 2014 growth forecasts for the global economy Tuesday, but said advanced economies’ rebound from a rough start would help offset stagnation in developing countries.

ost of the pick-up in growth this year will come from high-income countries, particularly the United States and the 18-nation euro one, the orld ank said in its twiceyearly Global conomic rospects report.

ut a rough start to the year bad weather in the United States, financial market turmoil and the Ukraine crisis dragged down global growth for the year as a whole, the ank said.

t marked down its 2014 forecast to a 2.8 percent pace from its anuary forecast of 3.2 percent. The global economy grew 2.4 percent growth in 2013.

igh- income countries would see stronger growth this year of 1. percent from 1.3 percent in the previous year, the orld ank said.

ut developing countries can e pect mi ed challenges from the accelerating growth in the rich countries.

As high-income economies e pand, their import demand should grow, boosting developing-country e ports.

ut developing countries will be hardpressed to find the capacity to meet that demand, because most of them already are fully recovered from the 2008 financial crisis and growing close to potential, the ashingtonbased development lender said.

eveloping countries were pro ected to grow 4.8 percent this year, substantially below the 5.3 percent estimate in anuary.

The outlook for developing countries is for flat growth in 2014. This marks the third year in a row of sub-five percent growth and reflects a more challenging post-crisis global economic environment, it said.

The World Bank’s latest outlook marked a deterioration from the January report, when it had raised its growth forecasts, saying both rich and developing countries appeared to be “finally turning the corner” after the global financial crisis.

Much of the slowdown this year reflected weakness in China, the world’s secondlargest economy.

First-quarter growth in Chinese gross domestic product was only a 5.8 percent annualized rate, with a sharp deceleration in industrial output and Beijing taking steps to tighten credit.

The Washington-based lender forecast growth of 7.6 percent this year, lower than China’s 7.7-percent growth rate in 2013. Beijing’s own target for this year is 7.5 percent.

GDP growth accelerated slightly in the first quarter in India, Mexico and the Philippines. But the pace of growth slowed in Indonesia, Mongolia, Malaysia and Brazil and turned negative in South Africa and Peru.

Sharp annualized contractions of between eight and 12 percent occurred in Ukraine, Thailand and Morocco.