Global economic growth is forecast to ease to a weaker-than-expected 2.6 per cent in 2019 before inching up to 2.7 per cent in 2020.
According to a statement on the World Bank website, growth in emerging market and developing economies was expected to stabilise next year as some countries move past periods of financial strain, but economic momentum remains weak.
The statement also stated that emerging and developing economy growth was constrained by sluggish investment, and risks are tilted to the downside.
It further explained that the risks include rising trade barriers, renewed financial stress, and sharper-than-expected slowdowns in several major economies.
The World Bank Group President, David Malpass, said: “Stronger economic growth is essential to reducing poverty and improving living standards. Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential.
“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 transparency a high priority so that new debt adds to growth and investment.”
The Bank added: “Growth among advanced economies as a group is anticipated to slow in 2019, especially in the Euro Area, due to weaker exports and investment. US growth is forecast to ease to 2.5 per cent this year and decelerate to 1.7 per cent in 2020.
“Euro Area growth is projected to hover around 1.4 per cent in 2020-21, with softness in trade and domestic demand weighing on activity despite continued support from monetary policy.
“Growth among emerging market and developing economies is projected to fall to a four-year low of four per cent in 2019 before recovering to 4.6 per cent in 2020. A number of economies are coping with the impact of financial stress and political uncertainty.
“Those drags are anticipated to wane and global trade growth – which is projected to be the weakest in 2019 since the financial crisis a decade ago — is expected to recover somewhat.”