The Global Economic Prospects (GEP) is a twice-yearly World Bank Group flagship report that examines global economic trends and how they affect developing countries.
In her presentation Ms. Franziska Ohnsorge, lead author of the report, emphasized its salient points as follows:
- Global growth has been revised down by a 0.2 percentage point in 2014 to 2.6 percent, and by a 0.4 percentage point to 3 percent in 2015.
- While the recovery gained traction in the United States and the United Kingdom, it is struggling in the Euro Area and Japan, and a carefully managed slowdown is underway in China.
- Major forces shaping the global outlook in 2015-16 include tightening financial conditions, continued soft commodity prices, and weak global trade.
- Risks to this slow-moving global recovery are significant and tilted to the downside.
- The forces driving the global outlook and the associated risks pose significant policy challenges.
Björn Dohring, Head of Unit in the EC’s forecasting unit, commended the report for its comprehensive analysis and findings, not least as an important input into the EC’s own analysis and forthcoming winter economic forecast.
Questions raised by EC staff were on, amongst others, the prospects of growth for Africa and poverty reduction, projections for oil prices in 2015-16, and the role of remittances within the financial architecture.
On Africa Ms. Ohnsorge said the continent continued to be the bright hope within the global economy, having been a star performer in 2014. However, going forward, the fall in commodity prices is likely to slow African growth. As a result global poverty targets are likely to be missed under the current trajectory. As regards oil prices, she said prices are expected to stay low in the short to medium with only a very marginal increase expected by 2016. She described remittances from rich to poor countries as a great balancing instrument due to their counter cyclical nature and the diversity of the source of remittances
At the close of the discussion the representatives from the EC and the Bank agreed to continue dialogue on global economic trends and explore further discussions in Brussels on the occasion of the next edition of the GEP in July 2015.