World Bank Group cuts 2015 global GDP growth

On the economic front, the World Bank Group released their latest Global Economic Prospects (GEP) report, confirming “a fourth consecutive year of disappointing economic growth this year”. They had forecasted in January that global GDP growth would rise moderately to 3% in 2015, but that has now been cut to 2.8%.

The decline in commodity prices will put a strain on developing countries reliant on exports, but the World Bank believes that it should bode well for the medium and long term outlook for the global economy. Developing countries are advised to press ahead with structural reforms “to ensure a smooth adjustment to low commodity prices and gradually tightening financial conditions”.

While there is concern raised about the transition to tighter borrowing costs and the impact on capital flows, in the face of rate hikes from the US Federal Reserve, they also warn that “the strengthening dollar could also slow the U.S. economy more than expected earlier, leading to some global strain”.