Global economy to grow 2.7 percent in 2010 - World Bank
The global economy is poised to grow 2.7 percent this year after
shrinking in 2009, the World Bank said Wednesday in a report
highlighting risks to a "fragile" recovery.
The World Bank said the nascent recovery from the worst crisis since
the Great Depression was "expected to slow later this year as the impact
of fiscal stimulus wanes."
"Overall, these are challenging times," said Justin Lin, World Bank
chief economist.
"The depth of the recession means that even though growth has
returned, countries and individuals will continue to feel the pain of
the crisis for years to come," he said.
Key impediments to growth are troubled financial markets and sluggish
private sector demand amid high unemployment, the Washington-based
development lender said in its "Global Economic Prospects 2010" report.
Overall, global gross domestic product (GDP) - a broad measure of the
output of goods and services that fell by 2.2 percent last year - is
expected to expand 2.7 percent in 2010 and 3.2 percent in 2011.
Growth would be led by developing countries, whose economies would
have "relatively robust" growth of 5.2 percent this year and 5.8 percent
in 2011, after managing to buck the global downturn with 1.2 percent
growth last year.
China's massive economy would continue to be the primary engine, with
growth at 9.0 percent this year and the next. South Asia would post a
6.9 percent expansion in 2010, including a 7.5 percent rise in India.
Growth would be more moderate this year in Sub-Saharan Africa (3.8
percent), in Latin America (3.1 percent) and in eastern and central
Europe and Central Asia (2.7 percent). Rich countries, impacted the most
by the global financial crisis, would not recover so quickly.
Developed economies, which experienced a 3.3 percent plunge in GDP
last year, were projected to grow 1.8 percent in 2010 and 2.3 percent in
2011.
The United States, the world's biggest economy and the epicenter of
the financial crisis that triggered the downturn, would see 2.5 percent
growth in 2010 and 2.7 percent in 2011.
Hans Timmer, an author of the report, said data indicates that
unemployment will only get worse.
"Actually growth this year is not even strong enough to generate the
jobs for the new people that are coming on the global jobs market, let
alone that you need to create employment for the people who have lost
their jobs in 2009," Timmer said at a news briefing.
The projected modest global expansion this year should mean a rebound
in world trade volumes that plummeted 14.4 percent in 2009.
Trade volumes were projected to expand by 4.3 percent this year, and
accelerate to 6.2 percent in 2011.
Oil prices were forecast to hold around 76 dollars a barrel in 2010
and 2011.
"The recovery is fragile and expected to slow in the second half of
2010 as the growth impact of fiscal and monetary measures wane and the
current inventory cycle runs its course," said the poverty-fighting
bank.
The World Bank underscored the uncertainties about the strength and
durability of the recovery, saying it would depend on how much
household- and business-sector demand firms over the next few quarters.
"Neither a double-dip scenario, where growth slows appreciably in
2011, or a strengthening recovery can be ruled out," said the report.
That assessment contradicted the view of the bank's sibling
institution, the International Monetary Fund, whose managing director
Dominique Strauss-Kahn repeatedly has dismissed a double-dip scenario.
Developing countries are suffering a high human cost because of the
crisis, the bank said.
As many as 50,000 additional children may have died of malnutrition
in 2009 and by the end of 2010, 90 million more people are expected to
be living in poverty than would have been the case without the crisis.
The bank said an additional 35-50 billion dollars in funding would be
needed just to maintain current levels of programming.
Lin warned there were "no silver bullets" to restore growth. |