World Bank:Global Economic Prospects report

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News:The World Bank has released the 2020 Global Economic Prospects report.

Facts:

Key takeaways from the report:

Report on Global and Regional Growth:

  • The Global growth is set to rise by 2.5% this year from 2.4% in 2019 as trade and investment gradually recover.
  • The growth among advanced economies as a group is anticipated to slip to 1.4% in 2020 due to continued slowdown in the manufacturing sector.
  • But the growth in emerging markets and developing economies is expected to accelerate to 4.1%.However,this growth is not broad-based as the improvement in performance is likely to come from a small group of large economies 
  • The report also estimates growth to rise to 5.5% for the South Asian region as a whole in 2020 on the assumption of a modest rebound in domestic demand and improved business confidence.

Report on India:

  • The report has lowered its growth estimate for India to 5% for the current fiscal from the earlier projection of 6% for 2019-20.
  • The report cited a lingering weakness in credit from non-banking financial companies(NBFCs) as the main cause for the slowdown.
  • However,the report expects India’s growth to recover only slightly to 5.8% in the next fiscal year. 

Way forward:

  • The global economic outlook for 2020 envisions a fragile upward path that could be turned upside down as there is a high degree of uncertainty around the forecast given unpredictability around trade and other policies. 
  • However,if policy-makers manage to mitigate tensions and clarify unsettled issues in a number of areas – they could prove the forecast wrong by sending growth higher than anticipated.