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World Bank predicts 8220 disappointing 8221 economic growth

Article By: ,  Financial Analyst
June 11, 2014 10:45 AM

World Bank has predicted a "disappointing" growth result for economies in the developing world for 2014.

It was announced by the organisation that it now predicts growth in developing countries will be 4.8 per cent, down from its initial guess of 5.3 per cent.

World Bank president Jim Yong Kim said the growth rates forecast by the body are "far too modest to create the kind of jobs we need to improve the lives of the poorest 40 per cent".

Andrew Burns, a senior economist at the bank, who was also one of the new authors of the report, stated that the figures pose a series of problems regarding whether or not the developing world is seeing substantial enough economic growth.

"It's one thing to have one year where one-off factors explain why growth wasn't quite as strong as you anticipated. To have three years in a row where growth disappoints does have to start begging exactly those kinds of questions," he said.

Important growth areas

India and South Africa were among the nations named by World Bank as some of those that need to make progress in key areas such as energy, labour markets and infrastructure if they are to see good levels of economic growth in the coming years.

Economic growth is on a firmer footing in the UK, with the International Monetary Fund (IMF) recently admitting it got it wrong when it said the country's recovery was built on consumer spending, with the organisation stating that the UK has moved towards a more "investment-led recovery" in recent months.

However, the IMF did warn the Treasury that it must be aware of the risks of a housing bubble, as this could jeopardise the flourishing economic recovery in the UK. Chancellor George Osborne has denied that a housing bubble is growing in the UK, but critics have suggested the cost of homes is growing too fast to be sustainable and a crash will be just around the corner.

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