The growth of the global economy is expected to slow to 2.9% in 2019 compared with 3% in 2018, the World Bank said on Tuesday January 8th, citing elevated trade tensions and international trade moderation.
"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead," World Bank Chief Executive Officer Kristalina Georgieva said in the semi-annual Global Economic Prospects report.
Reuters reports that the World Bank outlook comes after a year when the United States and China started a bitter trade dispute, which has jolted financial markets across the world for months. The two economies have imposed tit-for-tat duties on each other's goods, although there were signs of progress on Tuesday as the two countries prepared to enter a third day of talks in Beijing.
Growth in the United States is likely to slow to 2.5% this year from 2.9% in 2018, while China is expected to grow at 6.2% in the year compared with 6.5% in 2018, according to the World Bank. In the Euro area, an easing of growth is also forecast, down to 1.6% in 2019 from 1.9% in 2018. For the United Kingdom, the report reiterated concerns raised by the Bank of England and the UK Treasury that a no-deal Brexit could be accompanied by significant economic disruption in the short term as well as more lasting losses over the medium term.
In the Middle East and North Africa, oil exporting countries including those in the Gulf Cooperation Council (GCC) are expected to see a rise to 2.6% from 2% in 2018. Egypt, which has recently benefited from business-friendly reforms and a rise in private consumption levels, is expected to see a rise in growth to 5.6%, which compares well with the average growth of 1.9% predicted for the region.
Emerging market economies are expected to grow at 4.2% this year, with advanced economies expected to grow at 2%, the World Bank said in the report.
Summing up the downward trend in projected growth figures for the global economy, the World Bank report – which is available to download from their website – has the sub-heading “Darkening Skies."