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World Bank predicts slowing down of economic growth of developing countries to 6.3 percent


June 9, 2011 - Beijing

The World Bank has predicted that economic growth in developing countries will slow to around 6.3 percent each year from 2011 to 2013, from 7.3 percent in 2010.

High-income countries will see growth slow to 2.2 percent in 2011 before picking up to 2.7 percent in 2012 and 2.6 percent in 2013, it said.

The World Bank's chief economist and senior vice-president for development economics, Justin Yifu Lin, said higher commodity prices could damage global growth prospects.

"Globally, GDP is expected to grow 3.2 percent in 2011 before edging up to 3.6 percent in 2012.But further increases in already high oil and food prices could significantly curb economic growth and hurt the poor", the China Daily quoted Lin, as saying.

The bank economists have predicted that China's economy will maintain its high growth and the government has plenty of room to further tighten monetary policy.

According to the World Bank report, Global Economic Prospects, Chinese economy will grow by 9.3 percent this year, before slowing to 8.7 percent in 2012 and 8.8 percent in 2013.

"What we're seeing now is a moderate slowdown. We see a lot of room for further tightening, and interest rates are still one percentage point below the level before the crisis, and if inflation is taken into account there is scope for a further hike," lead World Bank economist Ardo Hansson said.

He also said the government should use interest rates more than administrative measures to handle economic growth in the long term.

He described property market rather than inflation as the biggest risk facing the Chinese economy.

The director of development prospects at the World Bank, Hans Timmer, said decision-makers should focus more on signs that the economy is hitting its growth limits, and these are apparently indicated in the inflation rate and the real estate market.

Lu Zhiming, senior economist at the Bank of Communications, said that there is no need for another hike in interest rates this year, given the signs of slowdown.

ANI

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