Although risks from advanced economies have eased and growth is firming, despite ongoing contraction in the Euro Area, the pick-up in developing countries will be modest because of capacity constraints in several middle income countries, says the World Bank
In its latest Global Economic Prospects (GEP) report, the World Bank said the Global GDP is expected to expand to about 2.2 percent this year and strengthen to 3 percent and 3.3 percent in 2014 and 2015 respectively.
Developing country GDP is now projected to be around 5.1 percent in 2013, strengthening to 5.6 percent and 5. 7 percent in 2014 and 2015, respectively.
Also Read
Growth in Brazil, India, Russia, South Africa and Turkey has been held back by supply bottlenecks, the report said.
While external risks have eased, growth in these countries is unlikely to reach pre-crisis rates unless supply-side reforms are completed, the Bank said.
"The kind of situation which about a year ago, even nine months ago we were fearing, that there could be a huge downside risk, we don't think that is there.
Diminished risks, but the overall growth prospects also remain diminished.
So, this year's growth, we expect will be slightly--2013 will be slightly less than last year, only slightly," the World Bank Chief Economist, Kaushik Basu told a Press Conference.
This year's growth in developing countries is expected to be slightly more than last year's; growth in industrialised countries this year could be slightly less than last year's, and overall global economy, this year, slightly less than last year, he said.
"We expect a slow pickup from next year in overall growth, which means roughly the kind of analogy you can think of is that inverted plateau", he said.
