NEWS  

June 19th, 2016 | Written by Peter Buxbaum   

Global Growth Forecast Again Revised Lower

World Bank Downgraded Forecast to 2.4 Percent

"The World Bank has downgraded its 2016 global growth forecast to 2.4 percent from the 2.9-percent pace projected in January. The move is due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.

According to the latest update of its Global Economic Prospects report, commodity-exporting emerging market and developing economies have struggled to adapt to lower prices for oil and other key commodities, and this accounts for 40 percent of the downward revision. Growth in these economies is projected to advance at a meager 0.4-percent pace this year, a downward revision of 1.2 percentage points from the January outlook. . .

A significant increase in private sector credit — fueled by an era of low interest rates and, more recently, rising financing needs — raise potential risks for several emerging market and developing economies, the report finds. . . one development that bears caution is the rapid rise of private debt in several emerging and developing economies. In the wake of a borrowing boom, it is not uncommon to find non-performing bank loans, as a share of gross loans, to quadruple. . .
In an environment of anemic growth, the global economy faces pronounced risks, . .




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