World Bank suggests global economy is weakening
A new assessment from the World Bank suggests that the global economy is weakening.
Total growth is now expected to be just 2.6 per cent for 2019, with an increase to 2.7 per cent in 2020.
This follows the reduced estimation of growth for 2019 in January, from 3 per cent to 2.9 per cent.
One of the lead authors in the report, Franziska Ohnsorge, said that the World Bank had predicted trouble in its last forecast but adds “then it was a forecast…now we see it in the data”.
Ohnsorge described a “broad based disappointment” affecting trade, investment and manufacturing in both developed and emerging economies.
One of the key factors in the slowdown of economic growth has been trade conflict.
The tension between the US and China is of particular note as the two countries combined account for a third of global economic activity.
Linking to this, China’s growth is also expected to slow dramatically.
The annual average over the past three decades has sat at 10 per cent, however for 2019 growth is forecasted to be 6.2 per cent.
This is part of a deliberate slowdown of the Chinese economy, as experts believe the earlier growth rates are not sustainable.
Tensions between China and other nations are also expected to contribute to this slowdown.
There are many risks associated with this reduced growth including potentially further international trade tensions.
The bank’s principal role – to promote economic development and the reduction of poverty – has also been affected by this slow in growth.