Noting that the global economy is still struggling to gain momentum while many developing economies are less dynamic than they were in the past, the World Bank has projected that it would expand by three per cent this year.
The global economy grew by an estimated 2.6 per cent in 2014 and is projected to expand by 3.3 per cent in 2016 and 3.2 per cent in 2017.
Developing countries grew by 4.4 per cent in 2014 and are expected to edge up to 4.8 per cent in 2015.
Following another disappointing year in 2014, developing countries should see an uptick in growth this year, boosted in part by soft oil prices.
World Bank President Jim Yong Kim said: In this uncertain economic environment, developing countries need to judiciously deploy their resources to support social programmes with a laser–like focus on the poor and undertake structural reforms that invest in people.
It’s also critical for countries to remove any unnecessary roadblocks for private sector investment.
The private sector is by far the greatest source of jobs and it can lift hundreds of millions of people out of poverty
World Bank report said: Underneath the fragile global recovery lie increasingly divergent trends with significant implications for global growth
Activity in the United States and the United Kingdom is gathering momentum as labour markets heal and monetary policy remains extremely accommodative.
But recovery has been sputtering in the Euro area and Japan as legacies of the financial crisis linger.
The oil price collapse will result in winners and losers.
Kaushik Basu, World Bank Chief Economist and Senior Vice President said: Worryingly, the stalled recovery in some high–income economies and even some middle–income countries may be a symptom of deeper structural malaise.
As population growth has slowed in many countries, the pool of younger workers is smaller, putting strains on productivity.
The lower oil price, which is expected to persist through 2015, is lowering inflation worldwide and is likely to delay interest rate hikes in rich countries
This creates a window of opportunity for oil–importing countries, such as China and India.
Mr. Basu opined: What is critical is for nations to use this window to usher in fiscal and structural reforms, which can boost long–run growth and inclusive development.