Steady Growth?/Global Economic Forecast

Web Series, Politics

Steady Growth?/Global Economic Forecast

The World Bank has just issued a report forecasting a solid global economic recovery based upon indications of more stable growth coming from developing countries.

Ambassador Muhamed Sacirbey: "My concern though is that we are underestimating the risk of speculation and new bubbles forming, especially in commodity prices."


Transcripts / Production notes / Scripts

The World Bank reports that the global economy is back on path. It is heading towards a slower but more sustainable phase of growth, adds the World Bank’s “Global Economic Prospects” report for 2011.

The global GDP is expected to slow down to 3.3 percent in 2011 and then increase to 3.6 percent in 2012.

SOUNDBITE (English) Andrew Burns, Manager of Global Macroeconomics, World Bank Group:
“The recovery right now is going very well, it is mature , we have gotten past the bounce back phase of the recovery, we are seeing more countries growing at strong rates , we are seeing more components of demand contributing to growth, all that is very good news.”

The growth of domestic demand in developing countries, supported by the flow of international capital, is increasingly proving to be a strong engine for the world economy.

SOUNDBITE (English) Andrew Burns, Manager of Global Macroeconomics, World Bank Group:
“Most of the growth is coming from developing countries. Their growth rates are almost twice as high as those in high income countries. As a result almost 46 percent of all the growth in the world in 2011 is going to be coming from developing countries. That is a real encouraging sign both of the health of their economies but also about their increasing role in the world economy.”

East Asia and the Pacific lead the global recovery, followed by South Asia and Sub Saharan Africa. And they clearly out-perform some regions in Europe and Central Asia.

SOUNDBITE (English) Andrew Burns, Manager of Global Macroeconomics, World Bank Group:
“One is the situation in Europe with the sovereign debt crisis, in a number of countries there, that has the potential to slow growth in Europe, reduce investors’ activity and that will have a calming effect on growth throughout the world and of course it is always a possibility that the situation there deteriorates dramatically and that will have important negative consequences for developing countries.”

Of concern is also the recent rapid rise of food prices. It brings back memories of the 2008 food price crisis and could be a major setback for the poor.

SOUNDBITE (English) Hans Timmer, Director of Development Prospects, World Bank Group:
“The poor spend a big part often, up to 50 percent of their budget on food, so if food prices rise they immediately impact their standard of living, so what we are seeing in real terms in local currencies, the increase is much less in nominal terms and also that the real prices are at the moment still somewhat lower than at the peak in 2008. So in that sense the situation is not as severe but at the same time you have to be worried because we might not be at the end of the current cycle of increases.”

But for the time being, the strengthening global economy helps to lift more people around the world out of poverty than ever before.

Details

Language: English

Year of Production: 2011

Length: 3 mins

Country: United Nations

Directors:

  • Ambassador Muhamed Sacirbey

Producers:

  • Susan Sacirbey