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World Bank predicts global economy to grow 3.2 per cent in 2014

By Ken Hanly     Jan 16, 2014 in Business
Washington - The World Bank claims that the global economy has reached a turning point five years after the global recession hit. The Bank expects growth to pick up in the U.S., Europe, and Japan but that China's growth will slow.
The World Bank report Global Economic Prospects expects global growth of 3.2 percent overall in 2014. The bi-annual report was published on Tuesday January 14 and is the first report of 2014.
The higher income more developed countries can expect growth of 2.2 percent which is up from the 1.5 percent of 2013. The report notes: “This strengthening of output among high-income countries marks a significant shift from recent years when developing countries alone pulled the global economy forward” . The U.S. in particular is showing good signs of recovery along with the 18-member Euro currency zone which had been a drag on the global economy during 2013. Improved import demand from the area will help to compensate for the US tapering moves. However, tapering could cause negative effects:"The looming wind down of the Fed's multi-billion dollar monetary stimulus package could have a profound impact on the global economy, trade partners Russia and China told the G20 summit in St. Petersburg. " Developing markets may be negatively impacted both by a slow down in growth in China and the tapering process in the U.S. The tapering program began in December of last year. However, the World Bank believes that overall strong growth will counter these effects and lessen market shocks.
Last year China's economic growth dropped below 8 percent for the first time in two decades. GDP in China is predicted to remain flat at 7.7 percent this year and then slow further to 7.5 percent in both 2015 and 2016. China is shifting to a more domestically oriented consumption based economy instead of relying upon exports.
Russia is expected to increase growth considerably from a low 1.4 percent last year to 2.2 per cent in 2014, 2.7 in 2015, and 3.0 in 2016. Brazil's GDP is predicted now to be 2.4 percent growth rather than 4. Mexico growth is downgraded from 3.9 percent to 3.4 and India from 6.5 to 6.2 percent in 2014. The reports are often modified throughout the year.
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