SA economy expected to grow 1.3% in 2019, says World Bank

Galtero Lara
Enero 10, 2019

The World Bank expects a slowdown in economic growth in the countries of the eastern part of the Europe and Central Asia region.

Regional growth is expected to accelerate to 3.4 percent in 2019, predicated on diminished policy uncertainty and improved investment in large economies together with continued robust growth in non-resource intensive countries.

In a report titled "January 2019 Global Economic Prospects: Darkening Skies" released January 8, the Washington-based multilateral lender said "the outlook for the global economy has darkened" this year. "The challenging political environment could adversely affect the ongoing reform agenda and economic activity in some countries", the report says.

Worldwide trade and manufacturing activity have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures, it said.

Noting that a number of developments could act as a further brake on activity, the report said a sharper tightening in borrowing costs could depress capital inflows and lead to slower growth in many emerging market and developing economies.

The World Bank's 7.5 per cent growth projection for the next fiscal year is slightly higher than the 7.4 per cent made by the International Monetary Fund last October.

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China's economy also is slowing amid the trade dispute, and growth should slip to 6.2% this year and next. The bank cut its forecast for growth in China by 0.1 point to 6.2% this year. In 2019-20, it is forecast to rebound to 4.8 per cent.

In India, the growth has accelerated, driven by an upswing in consumption, and investment growth has firmed as the effects of temporary factors wane, the World Bank said in its latest report. But its growth is forecast to fall to 7 per cent in the current fiscal year. "In a nutshell, growth has weakened, trade tensions remain high, several developing economies have experienced financial stress, and risks to the outlook have increased", said Shantayanan Devarajan, senior director, Development Economics Vice Presidency, the World Bank Group.

There is an urgency for emerging markets and developing economies to get ready to cope with possible turbulence, a top World Bank official has said as she called on the governments to concentrate more on their debt management practices and accelerate the pace of reforms. "To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies".

In comparison, China is expected to register a much lower growth rate of 6.3 per cent in 2018-19.

The US, though, is faring better in that group with a 2.9 per cent growth last year and projected growth rates of 2.5 this year and 1.7 per cent and 1.6 in the next years.

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