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Wednesday, June 05, 2019, 20:57
World Bank cuts 2019 global growth forecast to 2.6%
By Edith Lu in Hong Kong
Wednesday, June 05, 2019, 20:57 By Edith Lu in Hong Kong

People walk past the World Bank Group's headquarters on May 3, 2013 in Washington, DC. (BRENDAN SMIALOWSKI / AFP)

The World Bank cut its forecast for this year’s global economic growth on Tuesday, citing weaker-than-expected slowdown in trade and declining global investments.

ALSO READ: IMF: China economy resilient amid global slowdown

The Washington-based bank said in its half-yearly report on global economic prospects that the world gross domestic product is projected to slow to 2.6 percent in 2019 -- 0.3 percentage points lower than its earlier forecast. 

For the short-term future, the global GDP is projected to edge up to 2.7 percent in 2020 and to 2.8 percent in 2021, according to the report.

The tit-for-tat trade spat between China and the United States and prolonged Brexit uncertainty were among a string of factors that have slowed the world economy

The tit-for-tat trade spat between China and the United States and prolonged Brexit uncertainty were among a string of factors that have slowed the world economy. 

“There’s been a tumble in business confidence, a deepening slowdown in global trade and sluggish investment in emerging and developing economies,” World Bank President David Malpass told reporters in a call. “Momentum remains fragile.”

Global trade growth is expected to slow to 2.6 percent this year -- the weakest pace of growth since the global financial crisis a decade ago.

READ MORE: Trade dispute could lead to global recession

The World Bank believes the increased tariffs imposed by the US and China last year have affected bilateral trade flows, as well as the prices of targeted products.

China’s GDP is expected to remain the same as the World Bank had forecast earlier – at 6.2 percent this year -- primarily reflecting softening manufacturing activity and trade. The bank assumes that China’s policy economic stimulus measures will partly mitigate domestic and external headwinds in future.

The bank said China’s economy has been supported by recent monetary and fiscal stimuli. Bank credit and bond issuance have picked up, but other non-bank lending has moderated due to regulatory tightening. 

The bank’s forecast cut follows that of the International Monetary Fund, which also predicted a slowdown and warned that the risks arose from trade disputes.

 

edithlu@chinadailyhk.com


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