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Global Economic Prospects

Weak Investment in Uncertain Times

Overview

Global Outlook

Global growth in 2016 is estimated at a post-crisis low of 2.3 percent and is projected to rise to 2.7 percent in 2017. Growth in emerging market and developing economies (EMDEs) is expected to pick up in 2017, reflecting receding obstacles to activity in commodity exporters and continued solid domestic demand in commodity importers. Weak investment and productivity growth are, however, weighing on medium-term prospects across many EMDEs. Downside risks to global growth include increasing policy uncertainty in major advanced economies and some EMDEs, financial market disruptions, and weakening potential growth. However, fiscal stimulus in key major economies—in particular, the United States—could lead to stronger-than-expected activity in the near term and thus represent a substantial upside risk to the outlook.

 

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Regional Outlooks

Emerging market and developing economies (EMDEs) grew by an estimated 3.4 percent in 2016, slightly below June projections. Among commodity exporters, output expanded an estimated 0.3 percent, as some improvement in Brazil and Russia and a modest increase in commodity prices was offset by further weakness in other exporters. In commodity importers, growth in 2016 is estimated at 5.6 percent, reflecting resilient domestic demand and generally accommodative macroeconomic policies. Going forward, EMDE regions with substantial numbers of commodity importers are expected to experience solid growth, while the outlooks for regions with large number of commodity exporters are more heterogeneous. Overall, EMDE growth is projected to pick up to 4.2 percent in 2017 and to an average of 4.7 percent in 2018-19, mainly on a recovery in commodity exporters supported by a gradual increase in commodity prices. However, a number of factors—including advanced economy policy uncertainty and slowing productivity growth—are expected to weigh on the medium- and long-term EMDE outlook.

  • East Asia and Pacific

    Regional output expanded by an estimated 6.3 percent in 2016, slightly slower than in 2015. Strong domestic spending, supported by generally benign financing conditions, largely offset weak export growth. China continued on the path of gradual deceleration and rebalancing. In the rest of the region, growth remained steady at 4.8 percent, as higher growth in commodity importers offset a slowdown in commodity exporters, which continue to adjust to lower prices. During 2017-19, regional growth is expected to moderate to 6.1 percent, with a gradual slowdown in China partly offset by a pickup in the rest of the region. Downside risks to the outlook increased compared to June. They include heightened policy uncertainty in major advanced economies; financial market disruptions; growth disappointments in major economies; as well as rising protectionist sentiments. Key policy challenges include an orderly rebalancing in China, and strengthening medium-term fiscal policies and macro-prudential frameworks across the region.

    East Asia and Pacific regional forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    East Asia and Pacific, GDPa
    6.7 6.5 6.3 6.2 6.1 6.1
    (Average including countries with full national accounts and balance of payments data only)b
    East Asia and Pacific, GDPb 6.7 6.5 6.3 6.2 6.1 6.1
            GDP per capita (U.S. dollars) 6.0 5.7 5.7 5.5 5.5 5.5
            PPP GDP 6.6 6.4 6.3 6.1 6.1 6.1
        Private consumption 7.9 7.1 6.9 7.0 7.0 7.0
        Public consumption 3.0 6.3 6.1 5.9 5.8 5.8
        Fixed investment 6.7 6.6 6.4 6.2 5.7 5.7
        Exports, GNFSc 5.2 2.6 3.3 4.3 4.8 4.8
        Imports, GNFSc 4.5 2.3 3.9 4.7 5.4 5.4
        Net exports, contribution to growth 0.3 0.2 -0.1 0.0 -0.1 -0.1
    Memo items: GDP                                                      
        East Asia excluding China                                             4.7 4.8 4.8 5.0 5.2 5.2
        China 7.3 6.9 6.7 6.5 6.3 6.3
        Indonesia 5.0 4.8 5.1 5.3 5.5 5.5
        Thailand 0.8 2.8 3.1 3.2 3.3 3.4

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time.  

    a. EMDE refers to emerging market and developing economy. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes American Samoa and Democratic People's Republic of Korea.

    b. Sub-region aggregate excludes American Samoa, Democratic People's Republic of Korea, Fiji, Kiribati, the Marshall Islands, the Federated States of Micronesia, Myanmar, Palau, Papua New Guinea, Samoa, Timor-Leste, Tonga, and Tuvalu, for which data limitations prevent the forecasting of GDP components.

    c. Exports and imports of goods and non-factor services (GNFS).

    East Asia and the Pacific country forecastsa

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Cambodia 7.1 7.0 7.0 6.9 6.9 6.8
    China 7.3 6.9 6.7 6.5 6.3 6.3
    Fiji 5.3 4.1 2.4 3.9 3.7 3.5
    Indonesia 5.0 4.8 5.1 5.3 5.5 5.5
    Lao PDR 7.5 7.4 7.0 7.0 6.8 7.2
    Malaysia 6.0 5.0 4.2 4.3 4.5 4.5
    Mongolia 8.0 2.3 0.1 2.0 3.5 3.7
    Myanmar 8.0 7.3 6.5 6.9 7.2 7.3
    Papua New Guinea 7.4 6.8 2.4 3.0 3.2 3.0
    Philippines 6.2 5.9 6.8 6.9 7.0 6.7
    Solomon Islands 2.0 3.3 3.0 3.3 3.0 3.0
    Thailand 0.8 2.8 3.1 3.2 3.3 3.4
    Timor-Lesteb 5.9 4.3 5.0 5.5 6.0 5.5
    Vietnam 6.0 6.7 6.0 6.3 6.3 6.2

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time.

    a. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes American Samoa and Democratic People's Republic of Korea.

    b. Non-oil GDP. Timor-Leste's total GDP, including the oil economy, is roughly four times the non-oil economy, and highly volatile, sensitive to changes in global oil prices and local production levels.

  • Europe and Central Asia

    Regional growth accelerated from 0.5 percent in 2015 to 1.2 percent in 2016, in line with expectations, due mainly to an easing of the recession in Russia as oil prices stabilized. Excluding Russia, regional growth slowed to 2.4 percent in 2016 from 3.5 percent in 2015, reflecting a slowdown in Turkey amid political uncertainty. In the eastern part of the region performance was mixed: activity picked up in Ukraine after two years of deep recession, growth continued to slow in Kazakhstan, and output contracted in Azerbaijan. In the western part of the region overall growth remained robust, despite moderating in several major countries (Turkey, Poland, and Hungary). Regional growth is expected to rise to 2.8 percent on average in 2018-19, driven mainly by a recovery in commodity exporters and Turkey. Risks remain tilted to the downside.

    Europe and Central Asia regional forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Europe and Central Asia, GDPa 2.3 0.5 1.2 2.4 2.8 2.9
    Europe and Central Asia, GDP excl. Russia 3.4 3.5 2.4 3.0 3.4 3.6
    (Average including countries with full national accounts and balance of payments data only)b  
    Europe and Central Asia, GDPb 2.3 0.5 1.2 2.4 2.7 2.9
            GDP per capita (U.S. dollars) 1.8 0.1 0.9 2.1 2.6 2.7
            PPP GDP 2.1 0.2 1.1 2.4 2.8 2.9
        Private consumption 1.3 -2.8 2.0 2.6 3.0 3.0
        Public consumption 2.2 1.1 0.7 1.2 1.4 1.4
        Fixed investment 2.0 0.4 0.3 4.6 6.7 5.4
        Exports, GNFSc 2.9 3.0 2.3 3.1 3.4 3.6
        Imports, GNFSc -0.8 -6.2 3.3 4.7 6.2 5.0
        Net exports, contribution to growth 1.2 2.9 -0.2 -0.3 -0.7 -0.3
    Memo items: GDP                                                      
    Central Europed 3.0 3.6 2.9 3.1 3.2 3.2
    Western Balkanse 0.5 2.3 2.7 3.2 3.6 3.7
    Eastern Europef -3.8 -7.7 -0.1 1.3 2.5 2.6
    South Caucasusg 2.7 1.6 -1.2 2.1 3.0 2.9
    Central Asiah 5.5 3.1 2.8 3.8 4.8 5.1
    Russian Federation 0.7 -3.7 -0.6 1.5 1.7 1.8
    Turkey 5.2 6.1 2.5 3.0 3.5 3.7
    Poland 3.3 3.9 2.5 3.1 3.3 3.4

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time.

    a. EMDE refers to emerging market and developing economy. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars.

    b. Sub-region aggregate excludes Bosnia and Herzegovina, Kosovo, Montenegro, Serbia, Tajikistan, and Turkmenistan, for which data limitations prevent the forecasting of GDP components.

    c. Exports and imports of goods and non-factor services (GNFS).

    d. Includes Bulgaria, Croatia, Hungary, Poland, and Romania.

    e. Includes Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia.

    f. Includes Belarus, Moldova, and Ukraine.

    g. Includes Armenia, Azerbaijan, and Georgia.

    h. Includes Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan.

     

    Europe and Central Asia country forecastsa

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Albania 1.8 2.8 3.2 3.5 3.5 3.7
    Armenia 3.6 3.0 2.4 2.7 3.0 3.2
    Azerbaijan 2.0 1.1 -3.0 1.2 2.3 2.3
    Belarus 1.7 -3.9 -2.5 -0.5 1.3 1.4
    Bosnia and Herzegovina 1.1 3.0 2.8 3.2 3.7 3.9
    Bulgaria 1.3 3.6 3.5 3.2 3.1 3.1
    Croatia -0.4 1.6 2.7 2.5 2.5 2.6
    Georgia 4.6 2.8 3.4 5.2 5.3 5.0
    Hungary 4.0 3.1 2.1 2.6 2.8 2.7
    Kazakhstan 4.2 1.2 0.9 2.2 3.7 4.0
    Kosovo 1.2 4.1 3.6 3.9 3.7 3.6
    Kyrgyz Republic 4.0 3.5 2.2 3.0 3.7 4.9
    Macedonia, FYR 3.6 3.8 2.0 3.3 3.7 4.0
    Moldova 4.8 -0.5 2.2 2.8 3.3 3.7
    Montenegro 1.8 3.4 3.2 3.6 3.0 3.0
    Poland 3.3 3.9 2.5 3.1 3.3 3.4
    Romania 3.1 3.7 4.7 3.7 3.4 3.2
    Russian Federation 0.7 -3.7 -0.6 1.5 1.7 1.8
    Serbia -1.8 0.8 2.5 2.8 3.5 3.5
    Tajikistan 6.7 6.0 6.0 4.5 5.2 4.5
    Turkey 5.2 6.1 2.5 3.0 3.5 3.7
    Turkmenistan 10.3 6.5 6.2 6.5 6.8 7.0
    Ukraine -6.6 -9.9 1.0 2.0 3.0 3.0
    Uzbekistan 8.1 8.0 7.3 7.4 7.4 7.4

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time.

    a. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars.

  • Latin America and the Caribbean

    Output in Latin America and the Caribbean is estimated to have contracted 1.4 percent in 2016, the second consecutive year of negative growth. This weakness was due to the combined effects of low commodity prices and domestic economic challenges in large economies. In South America, where a large share of countries are commodity exporters, GDP growth contracted 2.8 percent. Growth in Mexico and Central America slowed to 2.3 percent, while growth in the Caribbean decelerated to 3.2 percent. Regional growth is projected to recover, reaching 2.6 percent in 2019, as domestic constraints loosen and fiscal consolidation is completed. Downside risks to the outlook include rising policy uncertainty among advanced economies, a renewed slide in commodity prices, and weaker-than-expected activity among the region’s largest economies. A key policy challenge is to nurture the nascent and fragile recovery, particularly in South America, while completing the fiscal adjustment to lower commodity revenues

    Latin America and the Caribbean regional forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Latin America and the Caribbean, GDPa 0.9 -0.6 -1.4 1.2 2.3 2.6
    (Average including countries with full national accounts and balance of payments data only)b  
    Latin America and the Caribbean, GDPb 0.9 -0.6 -1.4 1.2 2.3 2.6
            GDP per capita (U.S. dollars) -0.2 -1.7 -2.5 0.1 1.2 1.6
            PPP GDP 1.1 -0.1 -0.9 1.4 2.4 2.6
        Private consumption 1.0 -0.6 -1.5 0.9 2.2 2.4
        Public consumption 2.2 0.9 -1.2 -1.2 0.5 0.9
        Fixed investment -1.5 -5.1 -4.9 0.4 2.3 3.4
        Exports, GNFSc 1.6 3.6 1.5 3.3 3.3 3.5
        Imports, GNFSc 0.1 -2.2 -2.4 0.2 2.1 2.8
        Net exports, contribution to growth 0.3 1.2 0.8 0.7 0.3 0.2
    Memo items: GDP                                                      
        South Americad 0.3 -1.9 -2.8 0.8 2.1 2.4
        Mexico and Central Americae 2.5 2.8 2.3 2.1 2.7 2.9
        Caribbeanf 4.2 3.4 3.2 3.1 3.4 3.3
        Brazil 0.5 -3.8 -3.4 0.5 1.8 2.2
        Mexico 2.3 2.6 2.0 1.8 2.5 2.8
        Argentina -2.6 2.5 -2.3 2.7 3.2 3.2

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time.

    a. EMDE refers to emerging market and developing economy. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes Cuba, Grenada,
    and Suriname.

    b. Sub-region aggregate excludes Cuba, Dominica, Grenada, Guyana, St. Lucia, St. Vincent and the Grenadines, and Suriname, for which data limitations prevent the forecasting of GDP components.

    c. Exports and imports of goods and non-factor services (GNFS).

    d. Includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, República Bolivariana de Venezuela, and Uruguay.

    e. Includes Costa Rica, Guatemala, Honduras, Mexico, Nicaragua, Panama, and El Salvador.

    f. Includes Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago. 

    Latin America and the Caribbean country forecastsa

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Argentina -2.6 2.5 -2.3 2.7 3.2 3.2
    Belize 4.1 2.9 -1.0 1.5 2.0 2.5
    Bolivia 5.5 4.8 3.7 3.5 3.4 3.4
    Brazil 0.5 -3.8 -3.4 0.5 1.8 2.2
    Chile 1.9 2.3 1.6 2.0 2.3 2.5
    Colombia 4.4 3.1 1.7 2.5 3.0 3.3
    Costa Rica 3.0 3.7 4.3 3.9 3.7 3.7
    Dominica 3.7 -2.5 1.3 2.8 2.7 2.7
    Dominican Republic 7.6 7.0 6.8 4.5 4.2 4.0
    Ecuador 4.0 0.2 -2.3 -2.9 -0.6 1.0
    El Salvador 1.4 2.5 2.2 1.9 2.0 2.0
    Guatemala 4.2 4.1 2.9 3.2 3.4 3.4
    Guyana 3.8 3.2 2.6 3.8 3.9 4.1
    Haitib 2.8 1.2 1.2 -0.6 1.5 2.0
    Honduras 3.1 3.6 3.7 3.5 3.4 3.2
    Jamaica 0.7 1.0 1.6 2.0 2.3 2.5
    Mexico 2.3 2.6 2.0 1.8 2.5 2.8
    Nicaragua 4.6 4.9 4.5 4.0 3.9 3.8
    Panama 6.1 5.8 5.4 5.4 5.5 5.5
    Paraguay 4.7 3.1 3.8 3.6 3.3 3.3
    Peru 2.4 3.3 4.0 4.2 3.8 3.6
    St. Lucia -0.7 1.3 1.0 1.8 2.2 2.5
    St. Vincent and the Grenadines 0.2 0.6 2.0 2.2 2.4 2.4
    Surinamec 0.4 -2.7 -7.0 0.5 1.1 1.3
    Trinidad and Tobago 0.8 -1.8 -2.8 2.3 3.6 3.2
    Uruguay 3.2 1.0 0.7 1.6 2.5 3.7
    Venezuela, RB -3.9 -5.7 -11.6 -4.3 0.5 1.0

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time.

    a. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars.

    b. GDP is based on fiscal year, which runs from October to September of next year.

    c. Growth rates for Suriname were not published in June 2016.

  • Middle East and North Africa

    Growth in the Middle East and North Africa is set to accelerate through 2018 following the bottoming out of oil prices in 2016. For oil-exporting economies, despite robust growth in the Islamic Republic of Iran, the recovery will be slightly slower than expected in mid-2016, reflecting fiscal consolidation plans (Gulf Cooperation Council countries and Iraq) and oil production capacity constraints (Iraq). Growth is projected to be somewhat more robust in oil-importers than expected in mid-2016, driven by a broad-based strengthening of activity in these countries. Key risks to the outlook are a weaker-than-expected rise in oil prices and conflict-related spillovers. Challenges include staying the course with policy adjustment, particularly fiscal policy, to support medium-term macroeconomic stability; diversifying away from oil; developing more dynamic private sectors; and harnessing the potential benefits of demographics.

    Middle East and North Africa regional forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Middle East and North Africa, GDPa 3.3 3.2 2.7 3.1 3.3 3.4
    (Average including countries with full national accounts and balance of payments data only)b  
    Middle East and North Africa, GDPb 3.4 3.2 2.6 3.1 3.4 3.5
            GDP per capita (U.S. dollars) 1.4 1.3 0.9 1.5 2.0 2.1
            PPP GDP 3.5 3.2 2.8 3.3 3.6 3.7
        Private consumption 6.3 2.3 2.8 3.0 3.4 3.5
        Public consumption 7.0 -0.5 -0.6 0.9 2.1 2.3
        Fixed investment 6.6 2.7 -1.4 3.7 3.5 3.9
        Exports, GNFSc 2.4 0.9 4.9 5.2 4.9 5.0
        Imports, GNFSc 7.1 -1.3 0.8 4.9 5.2 5.4
        Net exports, contribution to growth -1.7 1.0 2.0 0.6 0.3 0.3
    Memo items: GDP            
     Oil exporters 3.4 3.1 2.7 2.9 3.1 3.1
       GCC countriesd 3.2 3.5 1.6 2.2 2.6 2.7
           Saudi Arabia 3.6 3.5 1.0 1.6 2.5 2.6
       Iran, Islamic Rep. 4.3 1.7 4.6 5.2 4.8 4.5
     Oil importers 3.0 3.6 3.0 3.9 4.2 4.5
       Egypt, Arab Rep. 3.7 4.4 4.2 4.4 5.1 5.4
          Fiscal year basis 2.9 4.4 4.3 4.0 4.7 5.4

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time.

    a. EMDE refers to emerging market and developing economy. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes Libya, Syrian Arab Republic and Republic of Yemen due to data limitations.

    b. Sub-region aggregate excludes Djibouti, Iraq, and West Bank and Gaza, for which data limitations prevent the forecasting of GDP components.

    c. Exports and imports of goods and non-factor services (GNFS).

    d. Gulf Cooperation Council (GCC) countries includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates.

    Middle East and North Africa country forecastsa

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Algeria 3.8 3.9 3.6 2.9 2.6 2.8
    Bahrain 4.4 2.9 2.0 1.8 2.1 2.4
    Djibouti 6.0 6.5 6.5 7.0 7.0 7.0
    Egypt, Arab Rep. 3.7 4.4 4.2 4.4 5.1 5.4
       Fiscal year basis 2.9 4.4 4.3 4.0 4.7 5.4
    Iran, Islamic Rep. 4.3 1.7 4.6 5.2 4.8 4.5
    Iraq 0.1 2.9 10.2 1.1 0.7 1.1
    Jordan 3.1 2.4 2.3 2.6 3.1 3.4
    Kuwait 0.5 1.8 2.0 2.4 2.6 2.8
    Lebanon 1.8 1.3 1.8 2.2 2.3 2.5
    Morocco 2.6 4.5 1.5 4.0 3.5 3.6
    Omanb 2.5 5.7 2.5 2.9 3.4 3.6
    Qatar 4.0 3.6 1.8 3.6 2.1 1.3
    Saudi Arabia 3.6 3.5 1.0 1.6 2.5 2.6
    Tunisia 2.3 0.8 2.0 3.0 3.7 4.0
    United Arab Emirates 3.1 3.8 2.3 2.5 3.0 3.3
    West Bank and Gaza -0.2 3.5 3.3 3.5 3.5 3.6

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time.

    a. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes Libya, Syrian Arab Republic, and Republic of Yemen due to data limitations.

    b. A recent rebasing of Oman's GDP has resulted in significant revisions to historical and forecast growth rates compared to June 2016.

  • South Asia

    Economic activity in South Asia expanded by an estimated 6.8 percent in 2016, buoyed by robust domestic demand. India continued to post strong growth, reflecting ongoing tailwinds from low oil prices and support from structural reforms. Excluding India, regional growth is estimated at 5.3 percent in 2016; however, there were notable differences within the region depending on security issues, domestic policies, and reliance on remittance flows. Looking ahead, growth in the region is projected to edge up to an average of 7.3 percent in 2017-19, supported by dividends from ongoing policy reforms and strong domestic demand. Sluggish recovery in key export markets, weak private investment, and security challenges pose headwinds to the outlook. Risks are tilted to the downside, including reform setbacks, heightened domestic insecurity and political tensions, and unexpected tightening of financing conditions.

    South Asia regional forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    South Asia, GDPa, b 6.7 6.8 6.8 7.1 7.3 7.4
    (Average including countries with full national accounts and balance of payments data only)c  
    South Asia, GDPc 6.7 6.9 6.8 7.1 7.4 7.4
            GDP per capita (U.S. dollars) 5.3 5.5 5.4 5.7 6.0 6.1
            PPP GDP 6.7 6.8 6.8 7.1 7.4 7.4
        Private consumption 6.2 6.4 6.4 6.7 7.2 7.4
        Public consumption 8.9 2.2 7.0 7.2 7.5 7.6
        Fixed investment 2.7 6.2 6.5 7.4 7.4 7.3
        Exports, GNFSd 5.5 -4.9 2.2 5.6 7.1 7.4
        Imports, GNFSd 1.0 -1.6 1.6 5.1 6.6 6.9
        Net exports, contribution to growth 1.0 -0.7 0.1 -0.1 -0.2 -0.2
    Memo items: GDPb                                                            
      14/15 15/16 16/17e 17/18f 18/19f 19/20f
        South Asia excluding India                                            5.4 5.3 5.3 5.5 5.7 5.8
            India 7.2 7.6 7.0 7.6 7.8 7.8
            Pakistan (factor cost) 4.0 4.7 5.2 5.5 5.8 5.8
            Bangladesh 6.6 7.1 6.8 6.5 6.7 7.0

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time.

    a. EMDE refers to emerging market and developing economy. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars.

    b. National income and product account data refer to fiscal years (FY) for the South Asian countries, while aggregates are presented in calendar year (CY) terms. The fiscal year runs from July 1 through June 30 in Bangladesh and Pakistan, from July 16 through July 15 in Nepal, and April 1 through March 31 in India. 2017 data for Bangladesh, India, and Pakistan cover FY2016/17.

    c. Sub-region aggregate excludes Afghanistan, Bhutan, and Maldives, for which data limitations prevent the forecasting of GDP components.

    d. Exports and imports of goods and non-factor services (GNFS).

    d non-factor services (GNFS).

    South Asia economy forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Calendar year basis a            
    Afghanistan 1.3 0.8 1.2 1.8 3.0 3.6
    Bhutan 5.5 6.5 7.3 9.8 11.6 11.6
    Maldives 6.5 1.9 3.5 3.9 4.6 4.6
    Sri Lanka 4.9 4.8 4.8 5.0 5.1 5.1
                 
    Fiscal year basis a 14/15 15/16 16/17e 17/18f 18/19f 19/20f
    Bangladesh 6.6 7.1 6.8 6.5 6.7 7.0
    India 7.2 7.6 7.0 7.6 7.8 7.8
    Nepal 2.7 0.6 5.0 4.8 4.7 4.7
    Pakistan (factor cost) 4.0 4.7 5.2 5.5 5.8 5.8

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time.

    a. Historical data is reported on a market price basis. National income and product account data refer to fiscal years (FY) for the South Asian countries with the exception of Afghanistan, Bhutan, Maldives, and Sri Lanka, which report in calendar year (CY).  The fiscal year runs from July 1 through  June 30 in Bangladesh and Pakistan, from July 16 through July 15 in Nepal, and April 1 through March 31 in India. 2017 fiscal year data, as reported in the table for India, Pakistan, Bangladesh, Nepal, cover FY2016/17.

  • Sub-Saharan Africa

    Growth in Sub-Saharan Africa is estimated to have decelerated to 1.5 percent in 2016, the lowest level in over two decades, as commodity exporters adjust to low commodity prices. Regional GDP per capita contracted by 1.1 percent. South Africa and oil exporters account for most of the slowdown, while activity in non-resource intensive countries—agricultural exporters and commodity importers—generally remained robust. Commodity prices are expected to stabilize, but stay well below their levels of 2011, and fiscal adjustment needs remain large. Growth in the region is forecast to rebound to 2.9 percent in 2017, and rise above 3.5 percent by 2018, as policies in oil exporters continue to adjust. Risks to the outlook are tilted to the downside. They include heightened policy uncertainty in the United States and Europe, slower improvements in commodity prices, and tighter global financing conditions.

    Sub-Saharan Africa regional forecasts

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Sub-Saharan Africa, GDPa 4.7 3.1 1.5 2.9 3.6 3.7
    (Average including countries with full national accounts and balance of payments data only)b
    Sub-Saharan Africa, GDPb 4.7 3.1 1.5 2.9 3.6 3.7
            GDP per capita (U.S. dollars) 1.9 0.4 -1.1 0.2 1.0 1.1
            PPP GDP 5.0 3.3 1.7 3.1 3.9 4.0
        Private consumptionc 2.9 2.4 1.5 2.9 3.4 3.4
        Public consumption 2.2 1.7 2.1 2.7 3.0 3.0
        Fixed investment 9.4 5.1 3.3 5.4 7.0 7.1
        Exports, GNFSd 6.3 2.2 1.5 2.0 2.6 2.6
        Imports, GNFSd 3.0 1.4 2.3 3.1 3.7 3.8
        Net exports, contribution to growth 0.9 0.2 -0.3 -0.4 -0.4 -0.4
    Memo items: GDP                                                      
        SSA excluding South Africa                                            5.8 3.7 1.8 3.5 4.2 4.3
              Oil exporterse 5.6 2.9 -0.2 1.9 2.9 3.0
              CFA countriesf 5.7 4.3 4.3 4.8 5.3 5.5
              South Africa 1.6 1.3 0.4 1.1 1.8 1.8
              Nigeria 6.3 2.7 -1.7 1.0 2.5 2.5
              Angola 5.4 3.0 0.4 1.2 0.9 0.9

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time.

    a. EMDE refers to emerging market and developing economy. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes Central African Republic, Somalia, São Tomé and Príncipe, and South Sudan.

    b. Sub-region aggregate excludes Central African Republic, São Tomé and Príncipe, Somalia, and South Sudan, for which data limitations prevent the forecasting of GDP components.

    c. The sudden surge in private consumption in the region in 2013 is driven by the revised and rebased NIA data of Nigeria in 2014.

    d. Exports and imports of goods and non-factor services (GNFS).

    e. Includes Angola, Cameroon, Chad, Democratic Republic of Congo, Gabon, Nigeria, Republic of Congo, and Sudan.

    f. Includes Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Equatorial Guinea, Gabon, Mali, Niger, Republic of Congo, Senegal, and Togo.

    Sub-Saharan Africa country forecastsa

    (Real GDP growth at market prices in percent, unless indicated otherwise)
      2014 2015 2016e 2017f 2018f 2019f
    Angola 5.4 3.0 0.4 1.2 0.9 0.9
    Benin 6.5 5.0 4.6 5.2 5.3 5.3
    Botswanab 3.2 -0.3 3.1 4.0 4.3 4.3
    Burkina Faso 4.0 4.0 5.2 5.5 6.0 6.0
    Burundi 4.7 -3.9 -0.5 2.5 3.5 3.5
    Cabo Verde 1.8 1.5 3.0 3.3 3.5 3.5
    Cameroon 5.9 5.8 5.6 5.7 6.1 6.1
    Chad 6.9 1.8 -3.5 -0.3 4.7 6.3
    Comoros 2.1 1.0 2.0 2.5 3.0 3.0
    Congo, Dem. Rep. 9.5 6.9 2.7 4.7 5.0 5.0
    Congo, Rep. 6.8 2.6 4.6 4.3 3.7 3.7
    Côte d'Ivoire 8.5 8.4 7.8 8.0 8.1 8.1
    Equatorial Guinea -0.7 -8.3 -5.7 -5.7 -6.6 -6.6
    Ethiopiab 10.3 9.6 8.4 8.9 8.6 8.6
    Gabon 4.3 3.9 3.2 3.8 4.6 4.6
    Gambia, The 0.9 4.7 0.5 0.8 2.6 2.6
    Ghana 4.0 3.9 3.6 7.5 8.4 8.4
    Guinea 1.1 0.1 5.2 4.6 4.6 4.6
    Guinea-Bissau 2.5 4.9 4.9 5.1 5.1 5.1
    Kenya 5.3 5.6 5.9 6.0 6.1 6.1
    Lesotho 3.6 1.7 2.4 3.7 4.0 4.0
    Liberia 0.7 0.0 2.5 5.8 5.3 5.3
    Madagascar 3.3 3.1 4.1 4.5 4.8 4.8
    Malawi 5.7 2.8 2.5 4.2 4.5 4.5
    Mali 7.0 6.0 5.6 5.1 5.0 5.0
    Mauritania 6.4 3.0 4.0 4.2 3.8 3.8
    Mauritius 3.6 3.4 3.2 3.5 3.8 3.8
    Mozambique 7.4 6.6 3.6 5.2 6.6 6.6
    Namibia 6.4 5.3 1.6 5.0 5.4 5.4
    Niger 6.9 3.5 5.0 5.3 6.0 6.0
    Nigeria 6.3 2.7 -1.7 1.0 2.5 2.5
    Rwanda 7.0 6.9 6.0 6.0 7.0 7.0
    Senegal 4.3 6.5 6.6 6.8 7.0 7.0
    Seychelles 3.2 4.3 3.8 3.5 3.5 3.5
    Sierra Leone 4.6 -21.1 3.9 6.9 5.9 5.9
    South Africa 1.6 1.3 0.4 1.1 1.8 1.8
    Sudan 3.1 4.2 3.5 3.7 3.7 3.7
    Swaziland 2.7 1.7 -0.9 1.9 3.1 3.1
    Tanzania 7.0 7.0 6.9 7.1 7.1 7.1
    Togo 5.9 5.5 5.4 5.0 5.5 5.5
    Ugandab 4.8 5.0 4.6 5.6 6.0 6.0
    Zambia 5.0 2.8 2.9 4.0 4.2 4.2
    Zimbabwe 3.8 1.1 0.4 3.8 3.4 3.4

    Source: World Bank.

    e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time.

    a. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. Excludes Somalia, Central African Republic, and São Tomé and Príncipe.

    b. Fiscal-year based number.

Two Topical Issues

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1. The U.S. Economy and the World

Developments in the U.S. economy, the world’s largest, have effects far beyond its shores. A surge in U.S. growth could provide a significant boost to the global economy. Tightening U.S. financial conditions could reverberate across global financial markets, with adverse effects on some emerging market and developing economies that rely heavily on external financing. In addition, lingering uncertainty about the course of U.S. economic policy could have a significantly negative effect on global growth prospects. This section examines the potenti... See More

Two Topical Issues

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2. Weak Investment in Uncertain Times

Investment growth in emerging market and developing economies has slowed sharply since 2010. This deceleration has been most pronounced in the largest emerging markets and commodity exporters, but has now spread to the majority of these economies. While slowing investment growth is partly a correction from high pre-crisis growth rates, this also reflects a range of obstacles holding back investment: terms-of-trade shocks, slowing foreign direct investment inflows, as well as private debt burdens and political risk. Sluggish investment sets back... See More

Forecasts

Global Outlook Summary: January 2017 Forecasts                           

Global growth for 2017 is projected at 2.7 percent, 0.1 percentage point lower than the June 2016 forecast, and 0.4 percentage points higher than the estimate for 2016. Going forward, global growth is projected to pick up modestly, reaching 2.9 percent by 2018. The data in this table is reproduced from the January 2017 Global Economic Prospects report (PDF, 5.5MB). Charts can be generated by visiting the World Bank's DataBank website.

  2014 2015 2016e 2017f 2018f 2019f
Real GDP1            
World 2.7 2.7 2.3 2.7 2.9 2.9
   Advanced Economies 1.9 2.1 1.6 1.8 1.8 1.7
        United States 2.4 2.6 1.6 2.2* 2.1* 1.9*
        Euro Area 1.2 2.0 1.6 1.5 1.4 1.4
        Japan 0.3 1.2 1.0 0.9 0.8 0.4
   Emerging Market and Developing Economies (EMDE) 4.3 3.5 3.4 4.2 4.6 4.7
           Commodity-exporting EMDE 2.1 0.4 0.3 2.3 3.0 3.1
           Other EMDE 6.0 6.0 5.6 5.6 5.7 5.8
              Other EMDE excluding China 4.5 5.0 4.3 4.6 5.0 5.1
      East Asia and Pacific 6.7 6.5 6.3 6.2 6.1 6.1
           China 7.3 6.9 6.7 6.5 6.3 6.3
           Indonesia 5.0 4.8 5.1 5.3 5.5 5.5
           Thailand 0.8 2.8 3.1 3.2 3.3 3.4
      Europe and Central Asia 2.3 0.5 1.2 2.4 2.8 2.9
           Russia 0.7 -3.7 -0.6 1.5 1.7 1.8
           Turkey 5.2 6.1 2.5 3.0 3.5 3.7
           Poland 3.3 3.9 2.5 3.1 3.3 3.4
      Latin America and the Caribbean 0.9 -0.6 -1.4 1.2 2.3 2.6
           Brazil 0.5 -3.8 -3.4 0.5 1.8 2.2
           Mexico 2.3 2.6 2.0 1.8 2.5 2.8
           Argentina -2.6 2.5 -2.3 2.7 3.2 3.2
      Middle East and North Africa 3.3 3.2 2.7 3.1 3.3 3.4
           Saudi Arabia 3.6 3.5 1.0 1.6 2.5 2.6
           Iran, Islamic Rep. 4.3 1.7 4.6 5.2 4.8 4.5
           Egypt, Arab Rep.2 2.9 4.4 4.3 4.0 4.7 5.4
      South Asia 6.7 6.8 6.8 7.1 7.3 7.4
           India3 7.2 7.6 7.0 7.6 7.8 7.8
           Pakistan2 4.0 4.0 4.7 5.2 5.5 5.8
           Bangladesh2 6.1 6.6 7.1 6.8 6.5 6.7
      Sub-Saharan Africa 4.7 3.1 1.5 2.9 3.6 3.7
           South Africa 1.6 1.3 0.4 1.1 1.8 1.8
           Nigeria 6.3 2.7 -1.7 1.0 2.5 2.5
           Angola 5.4 3.0 0.4 1.2 0.9 0.9
Memorandum items:            
   Real GDP1            
      High-income countries 1.9 2.2 1.6 1.8 1.8 1.7
      Developing countries 4.4 3.6 3.5 4.4 4.8 4.9
         Low-income countries 6.2 4.8 4.7 5.6 6.0 6.1
      BRICS 5.1 3.8 4.3 5.1 5.4 5.5
      World (2010 PPP weights) 3.5 3.3 3.0 3.5 3.7 3.7
   World trade volume4 3.7 2.8 2.5 3.6 4.0 3.9
   Commodity prices            
      Oil price5 -7.5 -47.3 -15.1 28.2 8.4 4.6
      Non-energy commodity price index -4.6 -15.0 -2.6 1.4 2.2 2.1

Source: World Bank. 

Notes: PPP = purchasing power parity; e = estimate; f = forecast. World Bank forecasts are frequently updated based on new information. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not differ at any given moment in time. Country classifications and lists of Emerging Market and Developing Economies (EMDEs) are presented in Annex Table 1 of the report. BRICS include: Brazil, Russia, India, China, and South Africa. 

1. Aggregate growth rates calculated using constant 2010 U.S. dollars GDP weights.

2. GDP growth values are on a fiscal year basis. Aggregates that include these countries are calculated using data compiled on a calendar year basis. Pakistan's growth rates are based on GDP at factor cost. The column labeled 2017 refers to FY2016/17.

3. The column labeled 2016 refers to FY2016/17.

4. World trade volume for goods and non-factor services.

5. Simple average of Dubai, Brent, and West Texas Intermediate.

* The U.S. forecasts do not incorporate the effect of policy proposals by the new U.S. administration, as their overall scope and ultimate form are still uncertain. However, simulations indicate that the large reductions in corporate and personal income taxes suggested by the new administration could—if fully implemented and without consideration of any other policy changes—increase both U.S. GDP growth and global growth above baseline projections in 2017 and 2018. See the “Risks to the outlook” section of Chapter 1 for further details.

 

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