World Bank Chief Executive stresses importance of investing in people
The World Bank has pencilled in a 2019 growth rate of 4.2% for emerging markets and developing economies, noting that it is weaker than previously expected.
“Slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh on the outlook for emerging market and developing economies. Growth for this group is anticipated to hold steady at a weaker-than-expected 4.2% this year,” the bank said in a statement released earlier this week.
For global growth, the bank announced it has revised its growth forecast down by one tenth of a percentage point from 3% to 2.9%, stating that recently international trade and manufacturing activity have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures.
“At the beginning of 2018 the global economy was firing on all cylinders but it lost speed during the year and the ride could get even bumpier in the year ahead”, said World Bank Chief Executive, Kristalina Georgieva. “As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized.”
“To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies” Dr Georgieva noted.
“A number of developments could act as a further brake on activity. A sharper tightening in borrowing costs could depress capital inflows and lead to slower growth in many emerging market and developing economies. Past increases in public and private debt could heighten vulnerability to swings in financing conditions and market sentiment. Intensifying trade tensions could result in weaker global growth and disrupt globally interconnected value chains.”
The bank expects growth in advanced economies to drop to a paltry 2% for the year, citing various adverse factors in its January 2019 Global Economic Prospects outlook.
Caption: Chief Executive of the World Bank Group, Dr Kristalina Georgieva, formerly a European Commissioner. (Photograph by the European Commission’s Audiovisual-Service)