06.07.16
Brexit, a President Trump and Zika Virus are just a few of the reasons why the World Bank cut its estimates for global growth from 2.9% it forecast in January to 2.4% today. The bank also cut its forecast for growth in 2017 to 2.8% from 3.1%.
"The global outlook faces pronounced risks of another stretch of muted growth," said World Bank Chief Economist Kaushik Basu. "A wide range of risks threaten to derail the recovery."
The bank cut its projections for the US from 2.7% to 1.9% for the year, citing a weak energy sector, strong dollar and anemic international demand. As for China, the bank kept its forecast for a 6.7% expansion in China, the world's No. 2 economy, as Beijing juices output with more stimulus. But the World Bank warned of building financial risks that could trigger a deep slide in growth. Finally, the World Bank cut its growth estimate to 0.5% for Japan this year, noting that the world's No. 3 economy iisn't gaining traction despite the Bank of Japan's charge into negative-rate territory.
Elsewhere, governments from Brazil to South Africa to Indonesia also are facing deepening political turbulence, on top of persistent risks from wars in the Middle East and geopolitical tensions in the South China Sea.
"If we have a major shock, it can translate into a very sharp slowdown for the global economy," said Ayhan Kose, the chief author of the bank's Global Economic Prospects report.
"The global outlook faces pronounced risks of another stretch of muted growth," said World Bank Chief Economist Kaushik Basu. "A wide range of risks threaten to derail the recovery."
The bank cut its projections for the US from 2.7% to 1.9% for the year, citing a weak energy sector, strong dollar and anemic international demand. As for China, the bank kept its forecast for a 6.7% expansion in China, the world's No. 2 economy, as Beijing juices output with more stimulus. But the World Bank warned of building financial risks that could trigger a deep slide in growth. Finally, the World Bank cut its growth estimate to 0.5% for Japan this year, noting that the world's No. 3 economy iisn't gaining traction despite the Bank of Japan's charge into negative-rate territory.
Elsewhere, governments from Brazil to South Africa to Indonesia also are facing deepening political turbulence, on top of persistent risks from wars in the Middle East and geopolitical tensions in the South China Sea.
"If we have a major shock, it can translate into a very sharp slowdown for the global economy," said Ayhan Kose, the chief author of the bank's Global Economic Prospects report.
But perhaps more frightening to the World Bank than a Donald in The White House, are persistently low commodity prices, which are forecast to grow just 0.4%.