World Bank sees 2011 economic decline
Thu, 13 Jan 2011 08:00:15 GMT
The World Bank has warned that the rate of global economic growth will slow down in 2011 with emerging markets growing much faster than developed economies.
The 187-nation institution said in its latest Global Economic Prospects released on Wednesday that 2011 is expected to be a year of deceleration.
In the report, the multilateral institution predicted global growth of 3.3 percent for 2011, which is down from the 3.9 percent rate in 2010.
The World Bank is forecasting a six-percent growth in emerging countries this year, which is weaker than the seven-percent growth rate in 2010.
But the rate is, in fact, more than double the estimated 2.4-percent pace of growth expected for high-income countries, reflecting a decline from the 2.8-percent rate recorded last year.
The bank said that the growth rate in developed countries will, however, not be strong enough to significantly reduce high unemployment and unused capacity.
"The recovery in many high-income countries has not been strong enough to make major inroads into high unemployment in spare capacity," the report said.
The bank said that developing countries were leading the global economic recovery.
The report also warned that “serious tensions and pitfalls” remain in the global economy which could derail the recovery, including the eurozone financial market crisis, volatile capital flows and the rising prices of commodities such as food and fuel.