World bank worries about china and the eurozone crisis

World Bank worries about china and the eurozone crisis

But it also warns about the crisis in the eurozone. It revised its growth forecast for the emerging markets downward from 5.5 to 5.1 percent for this year. In its updated world economic outlook, the world bank predicts an increase in gross domestic product (gdp) of 5.6 and 5.7 percent for 2014 and 2015, respectively.

The organization slightly reduced its growth forecast for the global economy from 2.4 to 2.2 percent compared to last january. For 2014, she corrected the previously calculated plus from 3.1 to 3.0 percent.

In 2015, global GDP is expected to increase by 3.3 percent. "While there are signs of hope in the financial sector, the cooling of the real economy is actually unusually protracted," said world bank chief economist kaushik basu.

Until now, emerging economies such as china had provided decisive impetus for the global economy and also mitigated the downturn in the euro zone.

The slowdown in growth coupled with high unemployment in the industrialized nations and still weak world trade are among the major problems identified by the world bank. In a number of emerging economies in asia, africa and on the outskirts of europe, production bottlenecks were holding back economic activity. Negative consequences could be inflation or speculative bubbles.

Growing unemployment is a cause for concern in many european countries. This year, the region’s economy will shrink by 0.6 percent, then grow by 0.9 and 1.5 percent in the next two years, which is hardly enough to boost employment, according to the outlook released in washington on thursday (local time).

Uncertainty about the course of the u.S. Federal reserve’s low interest rate policy is also contributing to global uncertainty. "There is greater speculation and widespread concern that the u.S. Is going to stop its quantitative easing," basu said. There are fears, especially in the financial markets, that interest rate hikes will choke off the economy.

Dangerous are also falling commodity prices due to numerous new demands and energy sources. Commodity-exporting nations could experience "serious financial setbacks and weaker growth," world bank report says. Especially since the 4.0 percent increase in trade this year still lags far behind the 7.3 percent achieved before the financial crisis.