Global Economy to Suffer
The global economy will sputter along this year as Chinas slowdown prolongs a commodity slump and contractions endure in Brazil and Russia, the World Bank said. The Washington-based development bank lowered its forecast for 2016 growth to 2.9%, from a 3.3% projection in June, according to its bi-annual Global Economic Prospects report released Wednesday. The world economy advanced 2.4% last year, less than a forecast of 2.8% in June and slower than the 2.6% expansion in 2014, the bank said. The deteriorating picture in emerging markets is a big reason for a fifth straight year of global growth below 3%.
The World Bank cut its outlook for Chinas growth in 2016 to 6.7%, from 7% in June, and a 6.5% increase is estimated for next year. Brazils economy will shrin 2.5% this year, while Russias will contract 0.7%, the lender The global economy will need to adapt to a new period of more modest growth in large emerging markets, characterized by lower commodity prices and diminished flows of trade and capital, World Bank senior vice president and chief economist Kaushik Basu said in the report.