Image copyright
Getty Images
Trade tensions between the US and China are weighing on global economic growth
The global economy is weakening, according to a new assessment from the World Bank.
The bank said it now expects growth of 2.6% for 2019 edging up to 2.7% the following year.
The slowdown is widespread, according to the Bank’s economists, affecting many countries.
And there are risks to even this subdued outlook, including the uncertainty for business created by international trade tensions.
One of the lead authors of the report, Franziska Ohnsorge, said the World Bank had warned in its previous forecasts six months ago of darkening skies.
“Then it was a forecast” she told the BBC. “But now we see it in the data.”
In January, the World Bank changed its outlook for 2019 from 3% growth to 2.9%.
There has been a “broad based disappointment” affecting trade, investment and manufacturing and developed as well as emerging economies, Ms Ohnsorge said.
Trade conflict has been an important factor behind the weaker growth, in particular the tension between the US and China.
Between them, the two countries account for a third of global economic activity. Ms Ohnsorge said the uncertainty has an impact on investment by business
It has been recurrent theme in the World Bank’s analysis.
China’s growth is expected to continue to slow.
In the three decades up to 2010 the annual average was 10%. The forecast for this year is 6.2%
That partly reflects a deliberately encouraged slowdown which the Chinese government has sought to achieve, believing as most economists also do, that the earlier growth rate could not be sustained much longer.
So far, it has been reasonably orderly and the “hard landing” that many feared has not materialised.
But there is also an element of trade tension in the slower growth that China is expected to record this year.
Reducing poverty
Global economic weakness has a key impact on the Bank’s principal role: to promote economic development and the reduction of poverty.
Image copyright
Getty Images
Africa’s economy is growing but not enough to reduce poverty on the continent, said the World Bank
David Malpass, who was recently named as president of the World Bank by Donald Trump, said “Stronger economic growth is essential to reducing poverty and improving living standards.”
Figures for Africa are particularly troublesome in his respect.
Although the bank is forecasting somewhat stronger growth there this year than last – at 2.9% – it is still not enough to significantly reduce poverty on the continent.