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Joseph Inokotong, Abuja
The World Bank has projected that emerging and developing economies’ growth would pick up to 4.6 percent in 2020 from 4 percent in 2019.
This could be cheery news for Nigeria, whose economy has struggled to grow above 2.5 per cent.
But notwithstanding this development, the Bank cautioned that the anticipated expansion is still vulnerable to trade and financial disruptions.
“Emerging, developing economies’ growth to pick up to 4.6 per cent in 2020 from 4 per cent in 2019; expansion vulnerable to trade, financial disruptions”. It said.
The Bank also said that global growth would weaken to 2.6 per cent in 2019, albeit substantial risks abound
The World Bank projection is contained in its June 2019 Global Economic Prospects: Heightened Tensions, Subdued Investment, where it also explained that structural problems that misallocate or discourage investment also weigh on the outlook.
According to the World Bank, “emerging and developing economy growth is constrained by sluggish investment, and risks are tilted to the downside.”
These risks, the Bank pointed out include rising trade barriers, renewed financial stress, and sharper-than-expected slowdowns in several major economies.
The World Bank Group President, David Malpass, expressed worries over what he termed ‘subdued investment growth’ in developing economies which he said was holding back the countries from achieving their full potential.
He also decried rising debt levels in the affected countries and linked it to their under performing economic growth.
The Bank said that the “Global economic growth is forecast to ease to a weaker-than-expected 2.6 per cent in 2019 before inching up to 2.7 per cent in 2020.”
Raising the hope for countries like Nigeria, it said “Growth in emerging markets and developing economies is expected to stabilise next year as more countries move past periods of financial strain, but economic momentum remains weak.”
Malpass in his reaction said ‘Stronger economic growth is essential to reducing poverty and improving living standards.
“Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential.
“It’s urgent that countries make significant structural reforms that improve the business climate and attract investment.
“They also need to make debt management and transparency a high priority so that new debt adds to growth and investment.”
