Emerging markets to lead world GDP growth
World Bank warns global economy is not in the clear yet
Oil & Gas
WASHINGTON, D.C.— Developing countries will account for nearly half of the world’s economic growth this year and next, according to the World Bank’s Global Economic Prospects 2011.
The World Bank estimates global GDP, which grew 3.9 per cent in 2010, will slow to 3.3 per cent in 2011, before hitting 3.6 per cent in 2012.
Developing countries will grow six per cent this year and 6.1 per cent in 2012. That’s more than twice the growth projected for high-income countries, where economies will expand only 2.4 per cent in 2011 and 2.7 per cent the year after.
In fact, the World Bank said a full recovery from the recession isn’t a guarantee for some regions in emerging Europe, Central Asia and high-income nations.
“High unemployment remains the main challenge. That means that monetary policy, fiscal stimulus, as well as the growth [so far] have not been able to get the labor force back to work yet,” said Justin Yifu Lin, the World Bank’s chief economist and senior vice president for development economics.
“There’s substantial excess capacity built up in the inflated sectors like housing, office space, as well as in some manufacturing sectors during the boom period before the crisis, and [the excess capacity is still there],” Lin said.
He cautioned the fallout of the crisis isn’t completely over, pointing to risks such as the European financial markets and rising food, commodity and fuel prices that make developing countries more vulnerable.
GDP growth forecast by region:
High income countries (including Canada and the US)
2011: 2.4 per cent
2012: 2.7 per cent
East Asia and Pacific
2011: 8.0 per cent
2012: 7.8 per cent
Europe and Central Asia
2011: 4.0 per cent
2012: 4.2 per cent
Latin America and Caribbean
2011: 4 per cent
2012: 4 per cent
Middle East and North Africa
2011: 4.3 per cent
2012: 4.4 per cent
2011: 7.7 per cent
2012: 8.1 per cent
Sub-Saharan Africa (not including South Africa)
2011: 6.4 per cent in 2011
2012: 6.2 per cent in 2012
2011: 3.5 per cent
2012: 4.1 per cent