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World Bank forecasts slump

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World Bank forecasts slump

Thereport24.com, Dhaka:

The World Bank in a report on Wednesday forecasted that the world economy will see a three percent economic growth this year and 3.30 percent in 2016.

But in June last year, it predicted a 3.40 percent growth for 2015 and 3.50 percent for 2016.

Kaushik Basu, a top World Bank official, said some countries will be benefitted from the reduction in crude oil prices in the world market.

He also said the decline in oil prices would lead to a fall in inflation around the world, adding that investments would go up as interest rates would decrease.

The World Bank warned that oil prices could fall further and the economies that depend on oil could face an imminent financial disaster.

Kaushik said there were avenues for growth of Indian and Chinese economies, and the Indian economy could witness a seven percent growth next year.

The European economy also remains vulnerable, with banks in many countries reducing interest rates.

There have been a variety of initiatives to boost investments but the Eurozone is still in a crisis which cannot be overcome very soon.

In Europe, inflation will stand at 1.10 percent in this fiscal year while the growth could be 1.60 percent in 2016-17.

A 1.20 percent growth has been predicted for Japan for this year, which could reach 1.60 percent in 2016.

It will bring a disaster for all the nations around the world if the World Bank prediction comes out to be true.

But the US-based financial institution has also forecasted a little positive growth in the world economy, with the developing nations likely to experience a positive growth.

It said government debt would grow, and governments would have to take out loans from banks at additional interest rates in order to purchase essential commodities.

It was surprising to see that Bangladesh’s growth rate did not fall despite the recent global recession but how the country will face the upcoming meltdown caused by the ongoing political crisis demands a serious thought.

Ends/thereport24.com/MI/Feb 27, 2015