ABUJA – The President of World Bank Group, Mr Jim Kim, has advised developing nations to double their efforts in domestic reforms to ensure positive growth of their economies.
The advice is contained in the bank’s Global Economic Prospects (GEP) report released on Wednesday in Abuja.
Kim hinted that developing countries were headed for a year of disappointing growth, as weakness recorded in the first quarter of 2014 had delayed an “expected pick-up” in economic activities.
He said many factors contributed to the gloom in economic growth in the countries.
He added that the factors included “bad weather in the U.S., the crisis in Ukraine, rebalancing in China, political strife in several middle-income economies, slow progress on structural reforms and capacity constraints.
“Also, growth rates in the developing world remain far too modest to create the kind of jobs we need to improve the lives of the poorest 40 per cent of the people in those countries.
“Clearly, countries need to move faster and invest more in domestic structural reforms to get broad-based economic growth to levels needed to end extreme poverty in our generation.’’
The World Bank Group boss said that the bank had lowered its forecasts for developing countries at 4.8 per cent this year, down from its January estimate of 5.3 per cent.
He, however, said that the forecasts would rise to 5.4 per cent and 5.5 per cent in 2015 and 2016 respectively, noting that China was expected to grow by 7.6 per cent this year, but would depend on the success of rebalancing efforts.
“If a hard landing occurs, the reverberations across Asia will be widely felt,’’ he added.
Kim said that in spite of the first quarter weakness in the U.S., the recovery in high-income economies was gaining momentum, saying these economies were expected to grow by 1.9 per cent in 2014, accelerating to 2.4 per cent in 2015 and 2.5 per cent in 2016.
He added that the “Euro Area” was on target to grow by 1.1 per cent this year, while the U.S. economy, which contracted in the first quarter of the year due to severe weather was expected to grow by 2.1 per cent.
“The global economy is expected to pick up speed as the year progresses and is projected to expand by 2.8 per cent this year, strengthening to 3.4 per cent and 3.5 per cent in 2015 and 2016 respectively,” he stated.
He predicted that high-income economies would contribute about half of global growth in 2015 and 2016, compared with less than 40 per cent in 2013, adding that the acceleration in high-income economies would be an important impetus for developing countries.
“High-income economies are projected to inject an additional 6.3 trillion dollars to global demand over the next three years.
“This is significantly more than the 3.9 trillion dollars increase they contributed during the past three years, and more than the expected contribution from developing countries,’’ he noted. (NAN)