World Bank slashes global growth forecasts

The World Bank took an axe to its projections for global economic growth this year, while highlighting the impact which low commodity prices were having on the economies of emerging market commodity exporters.

Sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows meant the global economy would grow 2.4% in 2016 and not 2.9%, as the Washington-based lender had predicted in January.

"In an environment of anemic growth, the global economy faces mounting risks, including a further slowdown in major emerging markets," the World Bank cautioned in its latest Global Economic Prospects report.

“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices,” said Jim Yong Kim, World Bank Group President.

Commodity-exporting emerging nations were now expected to see growth of 0.4% in 2016, 1.2 percentage points less than previously forecast.

On a brighter note, the World Bank stuck by earlier predictions for the Chinese and Indian economies to grow by 6.7% and 6.9% this year, respectively.

Brazil and Russia, on the other hand, were now expected to remain in deeper recessions.

In Latin America and the Caribbean, the World Bank was now predicting that economic activity would shrink by 1.3% in 2016 following a fall of 0.7% in 2015, marking the first back-to-back years of recession in more than 30 years.

Forecasts for sub-Saharan Africa and the Middle East and North Africa were also revised lower.