The World Bank has been warning of a worldwide economic slowdown but its projections just took a turn for the worse.
In a 200-page report issued the bank laid out evidence that emerging markets have been stagnating as trade has contracted and financing conditions have worsened. The Bank knocked down its expectations for this year’s global growth to 2.9% from its previous forecast of 3%. It also lowered its 2020 growth forecast to 2.8% from 2.9%.
The World Bank blamed the downgrade on the global economy’s more-sudden-than-expected deceleration since the institution’s last forecast in June.And the situation could deteriorate further confirming Wall Street’s concerns about next year being a difficult one for companies with significant business abroad.
Still, the implications of an economic crunch are probably worse for low-income countries, many of which haven’t managed to raise per-capita incomes enough to keep closing the gap with the developed world. Although absolute poverty has been declining in places like India, progress has stalled in Sub-Saharan Africa which the World Bank projects could hold as much as 87% of the planet’s poor people by 2030.