Global Economic Prospects: Heightened Tensions, Subdued Investment
The World Bank Group’s flagship report states that global growth has continued to soften this year. Global growth in 2019 has been downgraded to 2.6%, 0.3 percentage point below previous forecasts, reflecting weaker-than-expected international trade and investment at the start of the year. Growth is projected to gradually rise to 2.8% by 2021, predicated on continued benign global financing conditions, as well as a modest recovery in emerging market and developing economies previously affected by Financial market pressure.
Meanwhile, rising debt constrains the ability of EMDE governments to support economic activity in the event of adverse developments, as well as finance growth-enhancing investments. This highlights the need for policy actions to undertake reforms to boost private investment and productivity growth. These reforms are particularly urgent in low-income countries, which face more significant challenges today than they did in the early 2000s.
Source: World Bank