The Strategist

WB lowers global economic growth assessment

01/09/2020 - 09:22

The global economic growth rate in 2020-2022 will accelerate by 0.1% per year, say experts of the World Bank. As follows from the recent report, growth in 2019 is estimated at 2.4%, in 2020 it will amount to 2.5%, in 2021 - 2.6%, and in 2022 - 2, 7%. Thus, the bank's economists lowered the bar set in June when they talked about an increase of 2.7% in 2020 and 2.8% in 2021.

At the same time, economists expect that growth in developed countries as a whole in 2020 will fall to 1.4%. According to WB forecasts, in the USA there will be a decline from 2.3% in 2019 to 1.8% “which will reflect the negative impact of previously introduced tariffs and increased uncertainty”, in the Eurozone - from 1.1% to 1 “against weak industrial activity.”

In emerging and developing countries, economic growth will accelerate this year to 4.1%. Moreover, as experts say, the rebound will be associated with an improvement in the performance of a small group of large economies. However, according to forecasts, about a third of the emerging and developing economies will slow down this year due to declining exports and investment.

As the main risks for the growth rates of the world economy, WB economists point to a new aggravation of trade tensions and trade policy uncertainties, a sharper-than-expected recession in the economies of major countries and financial turmoil in emerging and developing countries.

The report's authors are focused on the fact that the restoration of global economic growth will not significantly reduce poverty in the world: the growth of per capita production will remain “much lower than long-term average indicators”.