The World Bank has lowered its forecast for the global growth in 2016 to 2.4%, from the 2.9% estimated in January due to stubbornly low commodity prices, sluggish demand in advanced economies, weak trade and diminishing capital flows.
It further held the growth forecast of India steady at 7.6%, ahead of China’s 6.7%, while Brazil and Russia are projected to remain in deeper recessions. In its Global Economic Prospects, the Washington-based institution expected the world economy to grow 2.4 % in 2016, 0.5 percentage point lower than the bank’s forecast in January, Xinhua news agency reported.
“Although the global financial crisis is now seven years behind us, the world economy is still struggling to regain momentum,” said Kaushik Basu, chief economist at the World Bank.
Growth continues to falter in advanced economies, while there is considerable divergence of performance across emerging market and developing economies, and their overall growth remains below potential, said Mr. Basu.
According to the report, developing economies are forecast to expand by 3.5% in 2016, 0.6 percentage point lower than its January’s projection; advanced economies are expected to grow 1.7% this year, 0.5 lower than its January’s forecast.