Slow Global Economic Growth
By Dr Arvind Kumar
The World Bank, in its latest released report, Global Economic Prospects, has forecast slower economic growth the rest of this year and next. The World Bank is projecting a deceleration of gross domestic product (GDP) gains in the US, the euro zone, and the developing economies of Asia and Latin America compared to 2010. The only region where it foresees faster growth is Sub-Saharan Africa. In the US, Europe and Japan – where the so-called “recovery” has been characterized by anemic growth following the collapse of 2008 and early 2009, sustained high unemployment, and brutal attacks on the living standards of the working class – even slower GDP growth will mean a deepening of the slump. The bank estimated that the world economy will expand by 3.2 percent this year, down from 3.8 percent in 2010. Global growth in both 2012 and 2013 is expected to edge up just 3.6 percent – below the 2010 rate.
The growth of developing economies is expected to slow to around 6.3 percent a year through 2013, from 7.3 percent last year. The bank forecasts that in so-called “high-income” countries, growth will slow to 2.2 percent this year from 2.7 percent in 2010, before picking up to 2.7 percent and 2.6 percent in 2012 and 2013 respectively. Japan’s economy, recovering from its March tsunami and earthquakes, is forecast to not grow at all. Growth in the euro area is forecast to stay below 2 percent through 2013. The World Bank report’s projections are, if anything, unduly optimistic. They do not take into account data from May, which were almost universally negative. Reports from Europe, China and India in May likewise documented slower manufacturing activity and economic growth.
