In its latest Global Economic Prospects
(GEP) report, the bank said signs point to strengthening of developing
countries' economy in 2015 and 2016 to 5.4 and 5.5 percent,
respectively.
For this year, the Bank has lowered its forecast
for developing countries at 4.8 percent, down from its January estimate
of 5.3 percent.
China is expected to grow by 7.6 percent this
year but this will depend on the success of rebalancing efforts. If a
hard landing occurs, the reverberations across Asia would be widely
felt, the Bank said.
"Growth rates in the developing world remain
far too modest to create the kind of jobs we need to improve the lives
of the poorest 40 percent," said World Bank Group President Jim Yong
Kim.
"Clearly, countries need to move faster and invest more in
domestic structural reforms to get broad-based economic growth to levels
needed to end extreme poverty in our generation," Kim said.
The
global economy, it said, is expected to pick up speed as the year
progresses and is projected to expand by 2.8 percent this year,
strengthening to 3.4 and 3.5 per cent in 2015 and 2016, respectively.
High-income
economies will contribute about half of global growth in 2015 and 2016,
compared with less than 40 percent in 2013, it added.
Kaushik Basu, Senior Vice President and Chief Economist at the World Bank said the financial health of economies has improved.
"With
the exception of China and Russia, stock markets have done well in
emerging economies, notably, India and Indonesia. But we are not totally
out of the woods yet," he said.
"A gradual tightening of fiscal
policy and structural reforms are desirable to restore fiscal space
depleted by the 2008 financial crisis. In brief, now is the time to
prepare for the next crisis," Basu said.
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