The world economy is showing signs of bouncing back in 2014, five years after the global financial crisis.
The World Bank’s latest Global Economic Prospects report says developing-country growth is also firming thanks in part to the recovery in high-income economies, as well as moderating but still strong growth in China.
Growth prospects for 2014 are, however, sensitive to the tapering of monetary stimulus in the United States, which began earlier this month, and to the structural shifts taking place in China’s economy.
The report forecasts growth in developing countries to pick up from 4.8 per cent in 2013 to a slower than previously expected 5.3 per cent this year, 5.5 per cent in 2015 and 5.7 per cent in 2016.
While the pace is about 2.2 percentage points lower than during the boom period of 2003-07, the World Bank says the slower growth is not a cause for concern.
The World Bank says:
Almost all of the difference reflects a cooling off of the unsustainable turbo-charged pre-crisis growth, with very little due to an easing of growth potential in developing countries. Moreover, even this slower growth represents a substantial (60 percent) improvement compared with growth in the 1980s and early 1990s.
Global GDP is projected to grow from 2.4 per cent in 2013 to 3.2 per cent this year, stabilising at 3.4 per cent and 3.5 per cent in 2015 and 2016, respectively, with much of the initial acceleration reflecting a pick-up in high-income economies.