The World Bank (WB) on Wednesday released its latest report on ”Global Economic Prospects”, urging developing countries ”to focus on raising the growth potential of their economies as the road ahead remains bumpy”.
A statement from the WB, received here by PANA, said four years after the onset of the global financial crisis, the world economy remains fragile and growth in high-income countries is weak.
Developing economies have been advised to strengthen buffers to deal with risks from the
Euro Area and fiscal policy in the United States.
“The economic recovery remains fragile and uncertain, clouding the prospect for rapid improvement and a return to more robust economic growth,” said World Bank Group President, Jim Yong Kim.
He said: ”Developing countries have remained remarkably resilient thus far. But we can’t wait for a return to growth in the high-income countries, so we have to continue to support developing countries in making investments in infrastructure, in health, in education.”
”This will set the stage for the stronger growth that we know that they (developing economies) can achieve in the future.” Yong Kim added.
According to the WB, developing-country Gross Domestic Product (GDP) is estimated to have grown 5.1 percent in 2012, and is projected to expand by 5.5 percent in 2013, strengthening to 5.7 percent and 5.8 percent in 2014 and 2015, respectively.
The statement also revealed that growth in high-income countries has been downgraded from earlier forecasts at 1.3 percent for 2012 and 2013, firming at 2.0 percent in 2014.
It was further stated that growth in the Euro Area is now projected to only return to positive territory in 2014, with GDP expected to contract by 0.1 percent in 2013, before edging up to 0.9
percent in 2014 and 1.4 percent in 2015.
The report indicated that last year, developing countries recorded among their ”slowest economic growth rates of the past decade”, partly because of the heightened Euro Area uncertainty in May and June of 2012.
”Since then, financial market conditions have improved dramatically. International capital flows to developing countries, which fell 30 percent in the second quarter of 2012, have recovered,” the report added.