Friday, 07 June 2019 06:13

Global economy in slowest growth -World Bank

 
 

The World Bank on Thursday said the global economy has slowed to its lowest pace in three years.

In its new report titled: World Bank’s June 2019 Global Economic Prospects: Heightened Tensions, Subdued Investment, the bank said trade and investment have been weaker than expected at the start of the year, and economic activity in major advanced economies, emerging market and developing economies has been softer than previously anticipated.

It blamed unreliable government policy for the drought of new investment in Nigeria.

World Bank Group President David Malpass, said stronger economic growth is required to reduce poverty.

 

He said: “Stronger economic growth is essential to reducing poverty and improving living standards. Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential. It is urgent that countries make significant structural reforms that improve the business climate and attract investment. They also need to make debt management and transparency a high priority so that new debt adds to growth and investment.”

It projected that Nigeria economy will grow by 2.1 per cent this year and 2.2per cent next year.

This is 0.9 percentage points lower than 3.01 per cent growth rate assumed in the 2019 budget.

“In Nigeria, the recovery in oil production has fallen short of expectations, as policy uncertainty constrains investment in new capacity, while weak domestic demand amid a challenging business environment has dampened non-oil growth.

“Growth in Nigeria is anticipated to edge up to 2.2 per cent in 2020, but foreign exchange restrictions, supply disruptions in the oil sector, and a lack of needed reforms are seen as constraints to stronger growth,”the report read.

Growth in sub-Saharan Africa is projected to reach 3.3 per cent next year on the assumption that “investor sentiment will improve toward some of the large economies of the region, that oil production will recover in large exporters, and that robust growth in non-resource-intensive economies will be underpinned by continued strong agricultural production and sustained public investment”.

“While per capita GDP is expected to rise in the region, it will be insufficient to significantly reduce poverty. Even in areas where pushing back poverty has made inroads, economic growth has been concentrated in urban areas, providing little benefit to the rural poor.

“Regarding banking sector vulnerabilities, nonperforming loan (NPL) ratios have risen, or remain elevated, among some industrial commodity exporters (Cameroon, Namibia, Nigeria, South Africa), as weaker growth and softer export revenues have translated into increasingly impaired private sector balance sheets.”

 

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