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World Bank: Developing countries to hit 4.8% growth

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The World Bank expects developing countries to see an uptick in growth this year, boosted in part by soft oil prices, a stronger U.S. economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets.

Its Global Economic Prospects report projects  a 3 per cent global ecomomic growth  this year, 3.3 per cent in 2016 and 3.2 percent in 2017. Last year the economy only grew by a marginal 2.6 per cent.

However, growth in developing countries was ahead of the global average curve with 4.4 per cent in 2014 and is expected to edge up to 4.8 per cent in 2015, strengthening to 5.3 and 5.4 percent in 2016 and 2017, respectively.

In Sub-Saharan Africa, growth picked up only moderately in 2014 to 4.5 per cent, reflecting a slowdown in several of the region’s large economies, notably South Africa. Growth is expected to remain flat in 2015 at 4.6 per cent (lower than previously expected), largely due to softer commodity prices, and rise gradually to 5.1 per cent by 2017, supported by infrastructure investment, increased agriculture production, and buoyant services.

The outlook is subject to significant downside risks arising from a renewed spread of the Ebola epidemic, violent insurgencies, lower commodity prices, and volatile global financial conditions. Policy priorities include a need for budget restraint for some countries in the region and a shift of spending to increasingly productive ends, as infrastructure constraints are acute. Project selection and management could be improved with greater transparency and accountability in the use of public resources.

“In this uncertain economic environment, developing countries need to judiciously deploy their resources to support social programs with a laser-like focus on the poor and undertake structural reforms that invest in people,” said World Bank Group President Jim Yong Kim.

“It’s also critical for countries to remove any unnecessary roadblocks for private sector investment. The private sector is by far the greatest source of jobs and that can lift hundreds of millions of people out of poverty.”

 

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