MR. MALPASS: Good morning, everyone, it's David Malpass. Thank you for calling in.
Global growth has weakened since the January issue of Global Economic Prospects, and momentum remains fragile.
As this issue of the Global Economic Prospects highlights, there's been a tumble in business confidence, a deepening slowdown in global trade, and sluggish investment in emerging and developing economies.
This is worrisome because subdued investment weakens the foundations for sustained growth. Stronger economic growth is essential to reducing poverty and improving living standards. The global economic outlook, in both the near- and long-term, is confronting substantial challenges.
Downside risks to growth include rising trade barriers, a buildup of government debt, and deepening slowdowns in major economies.
In emerging markets and developing economies, growth is also constrained by structural constraints that misallocate or discourage investment, such as poor business environments, labor and product market controls, and weak governance.
Because of slowing global growth, elevated policy uncertainty, and limited fiscal space, investment growth in developing economies is expected to stay weak and below historical averages.
Another concern highlighted by the report is the issue of elevated debt. Emerging and developing economy government debt has risen since 2007 by an average of 15 percent to 51 percent of GDP. In an environment of low interest rates, these economies need to strike a careful balance between acquiring debt to promote investment growth, but avoiding risks associated with excessive debt levels.
And lastly, our GEP report also details the difficulties low-income countries face in trying to improve living standards. It will take comprehensive policy measures, including fostering integration into global trade, encouraging foreign direct investment, strengthening governance, and business climates, and bolstering deeper financial systems and financial inclusion to tackle these difficulties.
There are a wide range of policy options to improve investment and growth prospects. It's urgent that countries make significant structural reforms that improve the business climate and attract investment.
They also need to make debt management and debt transparency a high priority so that new debt adds to growth and investment.
I will now turn over to David Theis and Ayhan Kose to discuss more in detail the messages of the report and answer your questions.
Again, thank you for joining us today.