World Banks slash global growth outlook to 2.4% this year
WASHINGTON—The global economy is increasingly vulnerable to a sharp slowdown as troubles in emerging markets mount and as advanced economies struggle to grow, the World Bank warned Tuesday.
The bank’s latest projection pegs global growth at 2.4%, down from the 2.9% forecast in January and slower than last year’s weak pace. The bank also cut its forecast for growth in 2017 to 2.8% from 3.1%.
“The global outlook faces pronounced risks of another stretch of muted growth,” said World Bank chief economist Kaushik Basu. “A wide range of risks threaten to derail the recovery.”
Commodity exporters such as Brazil, Russia, Nigeria and Angola suffered some of the largest downward revisions. Governments have been forced to cut spending due to the price collapse in metals, energy and other commodities. Weakening currencies also are forcing central banks to raise interest rates to curb rampant inflation. And higher borrowing costs are weighing on investment and putting many company balance sheets deep into the red.