The World Bank has revised downward its global growth prediction, citing sluggish recovery in industrialized nations as the main reason. In good news, the global financial sector is stabilizing, the lender has said.
The global economy was expected to grow at an annual rate of 2.2 percent, the World Bank said Wednesday, cutting its growth estimate for 2013 by 0.2 percent compared with its forecast made in January.
In its Global Economic Prospects report, the international lender said global growth would be led by a 5.1 percent expansion in emerging economies and developing countries, as advanced industrialized countries would grow by only about 1.2 percent.
"In a turbulent global economy, that is good news when you have two periods without any big shifts and changes," World Bank Chief Economist Kaushik Basu told a news conference in Washington.
Economic expansion in what the World Bank called high-income countries was significantly slowed by the ongoing recession in the eurozone. For the 17-nation currency area, the bank sharply revised downward is forecast from a rate of contraction of 0.1 percent in January to 0.6 percent now.
The fallout from the eurozone's problems would also be felt in the Middle East and North Africa region, holding down growth there to just 2.5 percent. Economies in East Asia and the Pacific region were expected to expand most strongly in 2013, at a rate of 7.3 percent.
The World Bank noted that the global financial sector would further stabilize in 2013, diminishing the risks to growth in the real economy.
"We are moving toward a less volatile period where growth is going to be slower but less subject to strong fluctuations," said the World Bank report's co-author Andrew Burns.
Therefore, the bank predicted global economic expansion to accelerate to 3 percent in 2014 and to 3.3 percent in 2015.
uhe/rc (AFP, dpa)
