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Developing countries are headed for a year of disappointing growth, the World Bank said in its Global Economic Prospects (GEP) report, which has lowered its forecasts for developing countries to 4.8% growth rate this year from the January estimate of 5.3%.
In its latest report, the Bank has lowered its forecasts for developing countries, now eying growth at 4.8% this year, down from its January estimate of 5.3%.
Signs point to strengthening in 2015 and 2016 to 5.4 and 5.5%, respectively.
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China is expected to grow by 7.6% 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%," 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% this year, strengthening to 3.4 and 3. 5% in 2015 and 2016, respectively.
High-income economies will contribute about half of global growth in 2015 and 2016, compared with less than 40% 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.
