Developing countries are headed for a third straight year of disappointing growth this year. Bad weather in the US, the crisis in Ukraine, rebalancing in China, political strife in several middle-income economies, slow progress on structural reform, and capacity constraints are all contributing to a third straight year of sub 5 percent growth for the developing countries as a whole.
Growth in developing countries is expected to remain flat at 4.8 percent in 2014, down from the January estimate of 5.3 percent. Signs point to strengthening in 2015 and 2016 to 5.4 and 5.5 percent, respectively. China is expected to grow by 7.6 percent this year, but this will depend on the success of rebalancing efforts. If a hard landing occurs, the reverberations across Asia would be widely felt.
The report stresses that future growth must increasingly be driven by domestic efforts to boost productivity and competitiveness. Developing countries have shown their ability to prosper even as high-income country growth and imports weakened, but to continue to do so they will need to reinvigorate domestic reforms that have taken a backseat to fire-fighting and demand management in the post-crisis period.
Click to download the full Regional Outlooks (.pdf / 3.8MB).
For a detailed analysis of recent economic developments and outlook for each developing region, click on the icon below.