What the World Bank Is Doing
Updated January 2016
Global economic growth fell short of expectations in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity. Weak growth among major emerging markets will continue to weigh on global growth in 2016, but economic activity should still pick up modestly to a 2.9% pace, from 2.4% growth in 2015, as advanced economies gain speed, according to the World Bank’s January 2016 Global Economic Prospects.
Developing countries are forecast to grow by 4.8% in 2016, less than expected earlier but up from a post-crisis low of 4.3% in 2015.
Firmer growth ahead will depend on continued momentum in high income countries, the stabilization of commodity prices, and China’s gradual transition towards a more consumption and services-based growth model, says the report. It warns that a broad-based slowdown across developing countries could pose a threat to hard-won gains in raising people out of poverty. Global growth is expected to rise to 3.1% in 2017-18.
The World Bank Group and the international community are assisting developing countries on several fronts to help safeguard growth and accelerate the fight against poverty.
The Bank Group committed $60 billion in loans, grants, equity investments, and guarantees to promote economic growth, increase shared prosperity, and fight extreme poverty in developing countries in fiscal year 2015, which ended June 30, 2015.
Among its achievements in fiscal 2015, the Bank Group mobilized more than $1.6 billion in financing for Ebola response and recovery efforts. This includes nearly $1.2 billion from IDA and $450 million from IFC to enable trade, investment, and employment in the affected countries of Guinea, Liberia, and Sierra Leone. Learn more.
Early Response to the Crisis
The 2008 financial crisis, coming on the heels of the food and fuel crises, resulted in sharp reductions in global growth, trade, and access to finance for developing countries.
The World Bank Group responded with record amounts of financing for education, health, nutrition, and infrastructure in developing countries, committing more than $189 billion between 2008 and the end of fiscal year 2011.
The Bank Group’s commitments for social protection for the poorest and most vulnerable — including school feeding and cash transfer programs, such as Mexico’s Oportunidades — reached more than $9 billion in 72 countries during fiscal years 2009-2011. That figure is seven times the pre-crisis level of $1.2 billion.
To boost food security, the Bank has increased annual financing for agriculture to $6 billion to $8 billion a year, up from $4.1 billion in 2008. Agriculture commitments in FY13 reached $8 billion.
The Global Agriculture and Food Security Program (GAFSP), launched by the Bank in April 2010 to assist the G20’s support for agriculture and food security, provides pooled donor grant resources to finance country-led investment plans; as of October 2013, some $1.3 billion has been pledged to finance public and private sector projects in 25 countries.
The Bank also increased support to the drought-stricken Horn of Africa in FY11 to $1.88 billion; the Bank’s fund for the poorest countries contributed $30 million to support the United Nations High Commissioner for Refugees’ delivery of emergency services to Somali refugees at camps in Kenya and Ethiopia.