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Global Economic Prospects

GEP June 2014

Shifting priorities; building for the future

Global Economic Prospects | June 2014

Developing countries are headed for a third consecutive year of disappointing growth below 5 percent, as first quarter weakness in 2014 has delayed an expected pick-up in economic activity, says the World Bank’s latest Global Economic Prospects report, issued on June 10, 2014.

In contrast, recovery in high-income countries is gaining momentum, despite first quarter weakness in the United States. These economies are expected to grow by 1.9 percent in 2014, accelerating to 2.4 percent in 2015 and 2.5 percent in 2016. The Euro Area is on target to grow by 1.1 percent this year, while the United States economy, which contracted in the first quarter due to severe weather, is expected to grow by 2.1 percent this year (down from the previous forecast of 2.8 percent).

The global economy is expected to pick up speed as the year progresses and is projected to expand by 2.8 percent this year, strengthening to 3.4 and 3.5 percent in 2015 and 2016, respectively. High-income economies will contribute about half of global growth in 2015 and 2016, compared with less than 40 percent in 2013.

Open Quotes

The financial health of economies has improved. With the exception of China and Russia, stock markets have done well in emerging economies, notably, India and Indonesia. But we are not totally out of the woods yet. A gradual tightening of fiscal policy and structural reforms are desirable to restore fiscal space depleted by the 2008 financial crisis. In brief, now is the time to prepare for the next crisis. 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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