Weak emerging market growth ahead - FREE

Weak emerging market growth ahead - FREE

Weak growth among major emerging markets will weigh on global growth in 2016, but economic activity should still pick up modestly to 2.9 per cent from 2.4 per cent growth in 2015, as advanced economies gain speed, according to the World Bank’s January 2016 Global Economic Prospects.

Global economic growth was less than expected in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity, the report says. Firmer growth ahead will depend on continued momentum in high income countries, the stabilisation of commodity prices, and China’s gradual transition towards a more consumption and services-based growth model.

Developing economies are expected to expand by 4.8 per cent in 2016, less than expected earlier but up from a post-crisis low of 4.3 per cent in 2015. Growth is projected to slow further in China, while Russia and Brazil are expected to remain in recession in 2016. The South Asia region, led by India, is predicted to be a bright spot. The recently negotiated Trans-Pacific Partnership could provide a welcome boost to trade, the World Bank believes.

“There is greater divergence in performance among emerging economies. Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy,” warned World Bank Group vice president and chief economist Kaushik Basu. 

A faster-than-expected slowdown in large emerging economies could also have global repercussions. Other risks to the outlook include financial stress around the U.S. Federal Reserve tightening cycle and heightened geopolitical tensions, the report added.

Latest Issue

May 2017

reactions-latest-issue  

In this month's Reactions

  • Political risk
  • Terror modelling
  • Drought
  • Flood Re turns 1

Click here to view this issue

 

Follow Us on Twitter @reactionsnet

Catastrophe Centre