WB warns of 3rd sub-par growth in poor economies

MANILA, Philippines - The World Bank has warned that developing countries are headed for another year of disappointing growth, a third consecutive sub-par performance.

In its Global Economic Prospects (GEP) report released yesterday, the World Bank said the weak first quarter has delayed an expected pick-up in economic activity this year.

It cited the Philippines, which recorded a lower than expected 5.7 percent gross domestic product (GDP) growth in the first three months of the year. The government attributed the negative impact of Super Typhoon Yolanda and the slow recovery efforts as the main culprits for the slowdown.

The World Bank forecasts a full year 2014 economic growth rate of 6.5 percent, within the lower range of the Philippine government’s target 6.5 to 7.5 percent range.

If reconstruction work related to the natural catastrophes rebounds, the World Bank said, GDP is estimated to zoom to 7.1 percent in 2015, but settle to a modest 6.5 percent in 2016.

Meanwhile, the report said bad weather in the US, the crisis in Ukraine, rebalancing in China, political strife in several middle-income economies, slow progress on structural reform, limited regional conflicts, and capacity constraints are all contributing to a third straight year of sub five-percent growth for the developing countries as a whole.

World Bank Group president Jim Yong Kim said growth rates in the developing world remain far too modest to create the kind of jobs needed to improve the lives of the poorest 40 percent of the world’s population.

 â€œClearly, countries need to move faster and invest more in domestic structural reforms to get broad-based economic growth to levels needed to end extreme poverty in our generation,” he said.

The World Bank has lowered its forecasts for developing countries, now eyeing growth at 4.8 percent this year, down from its January estimate of 5.3 percent.

China is expected to grow by 7.6 percent this year, but this will depend on the success of rebalancing efforts. If a hard landing occurs, the reverberations across Asia would be widely felt.