The World Bank is downgrading its 2016 global growth forecast to 2.4 per cent from the 2.9 per cent projected in January.
A statement issued by the Bank, and copied to the Ghana News Agency, said the move was due to the sluggish growth in the advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.
It said according to the latest update of its Global Economic Prospects report, commodity-exporting emerging market and developing economies had struggled to adapt to lower prices for oil and other key commodities, which accounted for half of the downward revision.
It noted that growth in those economies was projected to advance at a meagre 0.4 per cent pace this year, a downward revision of 1.2 percentage points from the January outlook.
"This sluggish growth underscores why it's critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty," said the World Bank Group President Jim Yong Kim, in the statement.
"Economic growth remains the most important driver of poverty reduction, and that's why we're very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices."
The statement said commodity-importing emerging markets and developing economies had been more resilient than exporters, although the benefits of lower prices for energy and other commodities had been slow to materialise.
It explained that those economies were forecasted to expand at a 5.8 per cent rate in 2016, down modestly from the 5.9 per cent pace estimated for 2015, as low energy prices and the modest recovery in advanced economies supported economic activity.
It said among major emerging market economies, China was forecast to grow at 6.7 per cent in 2016 after 6.9 percent last year.
It said India's robust economic expansion was expected to hold steady at 7.6 per cent, while Brazil and Russia were projected to remain in deeper recessions than forecasted in January.
It said South Africa was forecasted to grow at a 0.6 per cent rate in 2016, representing 0.8 of a percentage point more slowly than the January forecast.
It said a significant increase in private sector credit - fuelled by an era of low interest rates and, more recently, rising financing needs - raised potential risks for several emerging markets and developing economies, the report found.
"As advanced economies struggle to gain traction, most economies in South and East Asia are growing solidly, as are commodity-importing emerging economies around the world," said World Bank Chief Economist and Senior Vice President Kaushik Basu.
"However, one development that bears caution is the rapid rise of private debt in several emerging and developing economies. In the wake of a borrowing boom, it is not uncommon to find non-performing bank loans, as a share of gross loans, to quadruple."
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