Developing countries are headed for a year of disappointing growth, the World Bank has said in a report, lowering the forecast for developing countries to 4.8 per cent this year from the January estimate of 5.3 per cent.
In its latest Global Economic Prospects (GEP) report, the bank said signs point to strengthening of developing countries' economy in 2015 and 2016 to 5.4 and 5.5 per cent, respectively.
For this year, the Bank has lowered its forecast for developing countries at 4.8 per cent, down from its January estimate of 5.3 per cent.
China is expected to grow by 7.6 per cent this year, but this will depend on the success of rebalancing efforts. If a hard landing occurs, the reverberations across Asia would be widely felt, the Bank said.
"Growth rates in the developing world remain far too modest to create the kind of jobs we need to improve the lives of the poorest 40 per cent," said World Bank Group President Jim Yong Kim.
"Clearly, countries need to move faster and invest more in domestic structural reforms to get broad-based economic growth to levels needed to end extreme poverty in our generation," Kim said.
The global economy, it said, is expected to pick up speed as the year progresses and is projected to expand by 2.8 per cent this year, strengthening to 3.4 and 3. 5 per cent in 2015 and 2016, respectively.
High-income economies will contribute about half of global growth in 2015 and 2016, compared with less than 40 per cent in 2013, it added.
Kaushik Basu, Senior Vice President and Chief Economist at the World Bank said the financial health of economies has improved.
"With the exception of China and Russia, stock markets have done well in emerging economies, notably, India and Indonesia. But we are not totally out of the woods yet," he said.
"A gradual tightening of fiscal policy and structural reforms are desirable to restore fiscal space depleted by the 2008 financial crisis. In brief, now is the time to prepare for the next crisis," Basu said.
