World Bank forecasts surge in global economic growth

Posted on By OAEC

World Bank forecasts surge in global economic growth bigstock-Business-Growth-resized

Positive economic growth is being shown for the first time since the financial crisis in both emerging and developed countries. This has led the World Bank to forecast the fastest global economic pace in four years, increasing to 3.2% from 2.4% last year.

The steady continuous development of the wealthy west, combined with the advanced progress China is making in terms of economic strength and market dominance has powered this renewed vigour.

Andrew Burns, Director of the World Bank’s development prospects group, said that “For the first time in five years the high-income countries are going to be a second engine to the train of global growth”.

Economic growth in high income countries has been inhibited over the past few years by unsettled policies and fiscal consolidation. As this becomes less prevalent there will be a surge of growth predicted to reach 2.2% this year.

The USA is the largest economy in the world and is expected to perform the best as a result of this new drive. Expansion is predicted to be 2.8% this year, continuing its run of positive growth in ten consecutive quarters.

Europe is also recovering well having posted a 1.1% increase this year after a 0.4% dip in 2013.

From 4.8% in 2013 the forecast growth for developing countries is 5.3% this year, followed by 5.5% in 2015. This is only marginally lower than the record high figures reached in the 2003-07 boom and demonstrates positive signs in the current climate.

It is essential to maintain economic conditions in order for this growth to be achieved. Any sudden changes to the market would be incredibly detrimental to any progress that has been made and concerns have been raised over tapering of the U.S Federal Reserve’s $85 billion a month bond-buying programme. If global bond yields start to rise and interest rates rocket they could cause an abrupt decrease in capital inflows to developing countries.

If the global economy continues to improve in this way there are benefits to be reaped in every corner of the globe.