adminWashington. — The World Bank has raised its forecast for global growth for the first time in three years as advanced economies started to pick up pace, led by the US.
The rosier outlook suggests the world economy is finally breaking free from a long and sluggish recovery after the global financial crisis.
The World Bank predicted global gross domestic product will expand 3,2 percent this year, from 2,4 percent last year, according to its twice-yearly Global Economic Prospects. In the bank’s last forecast in June, it expected global growth to reach 3 percent this year.
The bank, in a report released on Wednesday, said the global economy had come to a “turning point,” as fiscal austerity and policy uncertainty no longer weighed as heavily on most richer economies. The bank expected stronger growth in the US in particular, of 2,8 percent this year, from 1,8 percent last year.
“For the first time in five years, there are indications that a self-sustaining recovery has begun among high-income countries,” the bank’s chief economist, Kaushik Basu, said in the report. This suggests “that they may now join developing countries as a second engine of growth in the global economy”.
The bank again shaved its forecasts for developing countries to 5,3 percent for this year, from the 5,6 percent it predicted in June.
Emerging markets have grown at their slowest pace in a decade for the past two years, after chalking up growth rates of about 7,5 percent before the global financial crisis hit in 2008. —Bloomberg.
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