The Global Economic Prospects 2015 by the World Bank forecasts that with the exception of India, all other major economies have fallen into a major slow down. It predicts that the exuberance of the developing world has almost finished in reviving the global economy.
The World Bank has reduced the target growth rate of the world economy at 2.8 per cent for 2015. Adverse conditions indicate that the world economy is slipping into a slowdown quicker than expected.
Developing word is facing a structural slow down which may last for many years to come. Hence the developed economies like the US have to support the global economic revival.
In an analytical part, the Report predicts that among the emerging word including India, Brazil, oil exporters and importers; India is the only growth contributor to the word economy. “In India, activity is buoyed by stronger confidence as a reform-minded government implements its agenda and lower oil prices help contain vulnerabilities”- the World Bank observes.
The Report notes that in India, gradual implementation of reforms has supported business and investor confidence and encouraged capital inflows. However, credit growth remains modest, reflecting weak bank balance sheets (mainly in public sector banks).
Developing country growth, buffeted by falling commodity prices, the stronger dollar, and tightening financial conditions, has been revised downward to 4.4 percent in 2015. Among the major economies, highest growth rate will be for India at 7.5 %, slightly higher than the Chinese growth rate of 7.1%.
The report predict that commodity-exporting developing countries may be vulnerable deeper slow down. On the other, there are visible gainers like India who may benefit from lower commodity prices.