The World Bank is downgrading its 2016 global growth forecast to 2.4% from the 2.9% 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% of the downward revision. Growth in these economies is projected to advance at a meager 0.4% pace this year, a downward revision of 1.2 percentage points from the January outlook.
China is forecast to grow at 6.7% after 6.9% last year. India’s robust economic expansion is expected to hold steady at 7.6%, while Brazil and Russia are projected to remain in deeper recessions than forecast in January. output in the Mexico and Central America sub-region, and the Caribbean, are expected to grow at 2.7% (increase from January estimate) and 2.6% respectively in 2016, and more in 2017 and 2018.