Global economy to slow in 2011: World Bank
2011-01-13 14:53:45
The World Bank on Wednesday forecast that the global economy will slow in 2011, and warned that rising commodity prices could spur a return to the sky-high inflation of 2008.
The Washington-based development lender estimated the world economy will grow 3.3 percent this year compared with 3.9 percent in 2010, a year of rebound from the 2009 recession.
Emerging and developing countries were expected to expand 6.0 percent, more than double the 2.4 percent annual rate of high-income countries, the bank said in its latest Global Economic Prospects report.
Overall, the pace of growth is too weak to give the recovery solid traction, it said.
"Unfortunately these growth rates are unlikely to be fast enough to eliminate unemployment and slack in the hardest-hit economies and economic sectors."
In addition, "serious tensions and pitfalls persist in the global economy, which in the short run could derail the recovery to differing degrees," it warned.
The World Bank expressed particular concern about rising commodity prices, including food and fuel, driven by loose monetary policies in the developed countries and solid demand in the emerging economies.
"Although real food prices in most developing countries have not increased as much as those measured in US dollars, they have risen sharply in some poor countries," it said.
"And if international prices continue to rise, affordability issues and poverty impacts could intensify."
"We are very concerned about the rise in the food prices... we see some similarities with the situation in 2008, just before the financial crisis," Hans Timmer, the bank's director of development prospects, said at a news conference at the bank's Washington headquarters.