Despite Oil Price Drop, World Bank Cuts Global Economic Forecast

The World Bank on Tuesday lowered its global growth forecast for 2015 and next year due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices.  The global development lender predicted the global economy would grow 3 percent this year, below a forecast of 3.4 percent made in June, according to its twice-yearly Global Economic Prospects report.

World GDP growth will reach 3.3 percent in 2016, as opposed to a June forecast of 3.5 percent, before dipping to 3.2 percent in 2017, it said.  “The global economy is at a disconcerting juncture,” World Bank chief economist Kaushik Basu told reporters. “It is as challenging a moment as it gets for economic forecasting.”

The world economy has been more sluggish than expected since the 2007-2009 global financial crisis.  The World Bank said strong growth prospects in the United States and Britain separated them from other rich nations, including members of the euro zone and Japan, which continue to face anemic economies and deflation fears.

Reuters

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