Downside risks have become more acute and include the possibility of disorderly financial market movements and an escalation of trade disputes.
It warns that global growth will slow to 2.9% in 2019, from 3% in 2018 with risks such as softer worldwide trade and investment, elevated trade tensions and substantial financial market pressures in some large emerging market and developing economies. The bank lowered its projection for growth in emerging markets by 0.5 point to 4.2%, and slightly downgraded its outlook for expansion in the euro area. In 2020 and 2021, the World Bank expects an increase in the growth rate of Russia's GDP to 1.8%.
India's GDP is expected to grow at 7.3% in the fiscal year 2018-19, and 7.5% in the following two years, the World Bank has forecast, attributing it to an upswing in consumption and investment. Growth in Nigeria is expected to rise to 2.2% in 2019, assuming that oil production will recover and a slow improvement in private demand will constrain growth in the non-oil industrial sector.
Angola is forecast to grow 2.9 percent in 2019 as the oil sector recovers as new oil fields come on stream and as reforms bolster the business environment. South Africa is projected to accelerate modestly to a 1.3% pace, amid constraints on domestic demand and limited government spending.
"India's growth outlook is still robust".
"Faced with these headwinds, the recovery in emerging market and developing economies has lost momentum. Skies are darkening and we see the global economy slowing". United States stocks suffered the worst December rout since the Great Depression. "However, rising interest rates and currency volatility are weighing on activity", the World Bank said in its latest report. The World Bank reasons that this is a result of increased consumption and investment. "We are also concerned about debt levels and especially debt levels in low income countries where during the period of time of low interest rates, there had been a build-up of debt and now debt service is eating into the government revenues making it more hard to fund essential social services", she said.
Conceived during the Second World War to fund Europe's reconstruction, the World Bank now focuses on alleviating poverty around the world.
Growth of the world economy is expected to slow to 2.9% this year, and 2.8% in 2020, slightly below the previous forecast, and the estimates for almost all regions and countries were downgraded.
The forecasts fall below the 7-8% target the government has set annually until 2022.
Japan's economy will grow 0.9% this year, up 0.1 point from six months ago. "India is still the fastest growing major economy", World Bank Prospects Group Director Ayhan Kose told PTI in an interview. While recent weak data is troubling, it remains to be seen if it's a sign of a deeper slowdown, he said.