DEVELOPING NATIONS SHOULD get ready for weak growth and “tougher times”, the World Bank has warned.
The Washington DC based bank says that there may be “a long period of volatility in the global economy” as the eurozone debt crisis escalates and China slows down.
In a scheduled report giving an update on the global economy’s health, it says the economies of poorer countries will grow by 5.3 per cent this year, down from 6.1 per cent in 2011.
Increased uncertainty will add to pre-existing headwinds from budget cutting, banking-sector deleveraging and developing country capacity constraints
A drop in child mortality rates and a rise in the number of children able to read and write in African countries has been credited to high growth rates.
Annual GDP growth averaged over 6.5 per cent in 2005-10 in Ethiopia, Ghana, Rwanda and Uganda, leading to a rise in literacy rates and drop in children dying, according to The Economist.
Much of this economic growth has come about because of the economic boom in China, which has invested heavily in the commodities sector in Africa in its quest for oil and minerals.
However, the world’s second largest economy is slowing down, growing by 8.1 per cent in the first quarter of the year, the slowest in three years.
“A slowdown in China would spill-over… and commodity dependent countries would be especially at risk of a slowdown in China’s investment,” the bank said.
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