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GEP January 2014

Coping with policy normalization in high-income countries


Global Economic Prospects | January 2014

Five years after the global financial crisis, the world economy is showing signs of bouncing back this year, pulled along by a recovery in high-income economies, says the World Bank’s latest Global Economic Prospects report, issued on January 14, 2014.

Developing-country growth is also firming, thanks in part to the recovery in high-income economies as well as moderating, but still strong, growth in China.

Growth prospects for 2014 are, however, sensitive to the tapering of monetary stimulus in the United States, which began earlier this month, and to the structural shifts taking place in China’s economy.

Open Quotes

Global economic indicators show improvement. But one does not have to be especially astute to see there are dangers that lurk beneath the surface. The Euro Area is out of recession but per capita incomes are still declining in several countries. We expect developing country growth to rise above 5 percent in 2014, with some countries doing considerably better, with Angola at 8 percent, China 7.7 percent, and India at 6.2 percent. But it is important to avoid policy stasis so that the green shoots don't turn into brown stubble. Close Quotes

Kaushik Basu
Senior Vice President and Chief Economist at the World Bank

Regional Outlooks

The report includes detailed analysis of recent economic developments for each developing region, i.e. East Asia and Pacific; Europe and Central Asia; Latin America and the Caribbean; Middle East and North Africa; South Asia; and Sub-Saharan Africa. The analysis and outlook for each region, including country-specific forecasts, forms Chapter 2 of the report.

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Capital flows and risks in developing countries

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