Sub-Saharan Africa awaits economic boom this year, given the World Bank’s (WB) prediction of 4.2 per cent growth from 3.4 per cent last year due to stabilization of commodity prices in the region against the world’s flagging trade, capital flows and episodes of financial volatility.
The trend is contrary to other regions in the developing countries where more than 40 per cent of the world’s poor live, that registered a remarkable slowed growth last year, says WB Group President Jim Yong Kim in the recently released Bank’s 2016 report on Global Economic Prospects.
"Developing countries should focus on building resilience to weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies," says Kim.
But “compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy," says the Group’s Vice President and Chief Economist Kaushik Basu in the report, noting that a combination of better fiscal and central bank policies could help mitigating the risks and supporting the growth.
However, he attributes poor performance last year to various factors including falling commodity prices, flagging trade and capital flows, and episodes of financial volatility especially among emerging economies.
But the report also asserts that the sustainable growth ahead will depend on the current momentum in high income countries, the stabilization of commodity prices, and China's gradual transition towards a more consumption and service-based growth model.
Developing economies are projected at 4.8 percent growth in 2016, less than earlier expectations but up from a post-crisis low of 4.3 per cent last year, says the report.
Growth is projected to slow further in China, while Russia and Brazil are expected to remain in recession in 2016. The South Asia region, led by India, is projected to be a bright spot. The recently negotiated Trans-Pacific Partnership could provide a welcome boost to trade.
However, a faster-than-expected slowdown in large emerging economies could have global repercussions, says the report.
The trend is contrary to other regions in the developing countries where more than 40 per cent of the world’s poor live, that registered a remarkable slowed growth last year, says WB Group President Jim Yong Kim in the recently released Bank’s 2016 report on Global Economic Prospects.
"Developing countries should focus on building resilience to weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies," says Kim.
But “compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy," says the Group’s Vice President and Chief Economist Kaushik Basu in the report, noting that a combination of better fiscal and central bank policies could help mitigating the risks and supporting the growth.
However, he attributes poor performance last year to various factors including falling commodity prices, flagging trade and capital flows, and episodes of financial volatility especially among emerging economies.
But the report also asserts that the sustainable growth ahead will depend on the current momentum in high income countries, the stabilization of commodity prices, and China's gradual transition towards a more consumption and service-based growth model.
Developing economies are projected at 4.8 percent growth in 2016, less than earlier expectations but up from a post-crisis low of 4.3 per cent last year, says the report.
Growth is projected to slow further in China, while Russia and Brazil are expected to remain in recession in 2016. The South Asia region, led by India, is projected to be a bright spot. The recently negotiated Trans-Pacific Partnership could provide a welcome boost to trade.
However, a faster-than-expected slowdown in large emerging economies could have global repercussions, says the report.
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