Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

World Bank slashes growth forecast and warns 'prepare for next crisis'

World Bank slashes growth forecast and warns 'prepare for next crisis'

The World Bank has warned investors to prepare for the next crisis and slashed its global growth forecast from 3.2% to 2.8% amid concerns about bad weather in the US, the Ukraine crisis and future changes to macro policy.

Overall the organisation sees global growth of sub-5% for the third consecutive year with developing countries set to be the biggest disappointment.

The World Bank lowered its January forecast of 5.3% growth from developing nations to 4.8%, although it expects them to rebound sharply over the next two years delivering 5.4% growth in 2015 and 5.5% in 2016.

The organisation forecasts growth of 1.9% from developed nations in 2014, which it anticipates will accelerate to 2.4 next year and 2.5% in 2016.

Kaushik Basu, senior vice president and chief economist at the World Bank, said that short term financial risks have become ‘less pressing’ although stock and bond markets remain vulnerable to changes in monetary policy.

'The financial health of economies has improved. With the exception of China and Russia, stock markets have done well in emerging economies, notably, India and Indonesia. But we are not totally out of the woods yet,' he said.

'A gradual tightening of fiscal policy and structural reforms are desirable to restore fiscal space depleted by the 2008 financial crisis. In brief, now is the time to prepare for the next crisis,'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Play Japan's slump, the umbrella revolution and the battle for Brazil

Japan's slump, the umbrella revolution and the battle for Brazil

With the arrows of Abenomics appearing to be missing their targets and political uncertainty rife in Hong Kong and Brazil we take a look at investor sentiment in this week's Investment Pulse

Your Business: Cover Star Club

Profile: The adviser that tempted Robin Minter-Kemp on board

Profile: The adviser that tempted Robin Minter-Kemp on board

It is rare to meet an impassioned individual who is willing to bang the drum for investment advisory right now

Wealth Manager on Twitter