SA economy expected to grow 1.3% in 2019, says World Bank

Cornelia Mascio
Gennaio 10, 2019

"Downside risks have become more acute and include the possibility of disorderly financial market movements and an escalation of trade disputes", it added.

There is an urgency for emerging markets and developing economies to get ready to cope with possible turbulence, a top World Bank official has said as she called on the governments to concentrate more on their debt management practices and accelerate the pace of reforms.

India's GDP is expected to grow at 7.3% in the fiscal year 2018-19, and 7.5% in the following two years, the World Bank has forecast, attributing it to an upswing in consumption and investment.

The regional outlook was kept from the October 2018 East Asia and Pacific Economic Update but the latest 2019 estimate is 0.1 percentage point lower than the projection in the June 2018 Global Economic Prospects report. Economy Minister Maxim Oreshkin projects overall GDP growth for Russian Federation of 1.3 percent in 2019.

"High unemployment and slow growth in household credit extension are expected to constrain domestic demand in 2019, while fiscal consolidation limits government spending", it said. Angola is forecast to grow 2.9% in 2019 as the oil sector recovers as new oil fields come on stream and as reforms bolster the business environment.

"India's growth outlook is still robust".

Trade conflict between the world's two largest economic powers already is inflicting collateral damage and threatens to do yet more harm to the global economy, the World Bank warned Tuesday, January 8.

"Faced with these headwinds, the recovery in emerging market and developing economies has lost momentum".

Rising borrowing costs and the trade war between the USA and China have dimmed the outlook for global growth and unnerved investors. Former US Treasury Secretary Larry Summers encouraged policy makers this week to prepare for a recession in the world's largest economy.

World Bank chief executive officer Kristalina Georgieva said the upswing in commodity exporters had stagnated, while activity in commodity importers was decelerating. The World Bank reasons that this is a result of increased consumption and investment. It committed almost $64 billion in loans in the fiscal year ended June 30 last year.

The World Bank kept its forecast for U.S. growth unchanged, at 2.5% this year.

Growth will probably increase to 1.7% in 2020 and 1.8% in 2021, it says.

Japan's economy will grow 0.9% this year, up 0.1 point from six months ago. Speaking about this to PTI, World Bank Prospects Group Director Ayhan Kose said: "India's recent growth numbers suggest that the economy remains robust despite temporary setbacks (due to demonetisation and GST)", Kose said.

"That is the big question, what these financial markets are telling us", Kose said.

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