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World Bank Predicts Sluggish Global Economy - 2002-12-11

A new report from the World Bank says a sluggish world economy will hinder poverty reduction in developing countries over the next 12 to 18 months. The report is called “Global Economic Prospects and the Developing Countries 2003: Investing to Unlock Global opportunities.” It says, “Uncertainties in financial markets have sapped the momentum of the modest recovery that began in late 2001.”

Richard Newfarmer is a World Bank economic adviser and lead author of the report. He spoke to VOA English to Africa reporter Joe De Capua about the economic outlook for the next year and a half. The report says, “After exceptionally slow growth in 2001 and 2002, global GDP (growth) is now expected to rise by two-point-five percent in 2003.” That’s higher than “the two previous years but sill well below the three-point-nine percent expansion recorded in 2000.

Mr. Newfarmer says rich nations are expected to grow two-point-one percent over the next twelve to eighteen months, “substantially below their potential growth rate.” That’s compared to three-point-nine percent in developing countries. He says, “While it is not a particularly strong performance for developing countries, it is a continuation of the recovery that began in late 2001 and early 2002.” “Frankly,” he says, “we anticipated that it would be more rapid at this point. But several factors have undermined consumer and business confidence.”

He says when economies in developed nations are not growing strongly, “it makes it a much more difficult environment” for trade and aid for developing countries. He says trade is growing at only half the rate it grew in the boom years of 1999 – 2000.