World Bank tips global economic growth up to 3.3 percent in 2010, 2011

08:14, June 10, 2010      

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The global economy is expected to expand between 2.9 and 3.3 percent in 2010 and 2011, strengthening to between 3.2 and 3.5 percent in 2012, according to a World Bank report released Wednesday.

The growth would reverse a 2.1 percent decline in 2009.

Developing economies are expected to grow between 5.7 and 6.2 percent each year from 2010 to 2012, said the World Bank's latest Global Economic Prospects 2010.

High-income countries, however, are projected to grow between 2.1 and 2.3 percent this year, not enough to undo the 3.3 percent contraction in 2009, followed by growth between 1.9 and 2.4 percent in 2011.

The United States, the world's biggest economy and the epicenter of the financial crisis that triggered the downturn, would see 3.3-percent growth in 2010 and 2.9 percent in 2011.

Meanwhile, China's economy would expand 9.5 percent this year and 8.5 next year, according to the report.

"The better performance of developing countries in today's world of multipolar growth is reassuring," said Justin Yifu Lin, chief economist and senior vice president of the World Bank. "But, for the rebound to endure, high-income countries need to seize opportunities offered by stronger growth in developing countries."

The recovery faced several important headwinds over the medium term, including reduced international capital flows, high unemployment, and spare capacity exceeding 10 percent in many countries.

According to the report, while the impact of the European debt crisis has so far been contained, prolonged rising sovereign debt could make credit more expensive and curtail investment and growth in developing countries.

On the upside, world merchandise trade has rebounded sharply and is expected to increase by about 21 percent this year, before growth rates taper down to around 8 percent in 2011-2012. Almost half of the rise in global demand in the period will come from developing countries.



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