Regional Outlooks from World Bank’s 2016 Global Economic Prospects

South AsiaThe region is projected to be a bright spot in the outlook for emerging and developing economies, with growth speeding up to 7.3 percent in 2016 from 7 percent in the year just ended. The region is a net importer of oil and will benefit from lower global energy prices. At the same time, because of relatively low global integration, the region is shielded from growth fluctuations in other economies. For FY 2016-17, India, the dominant economy in the region, is projected to grow at a faster 7.8 percent and growth in Pakistan (on a factor cost basis) is expected to accelerate to 4.5 percent.

East Asia and PacificGrowth in the region is projected to continue to slow to 6.3 percent in 2016 from a slightly less-than-expected 6.4 percent in 2015. Growth in China is forecast to ease further to 6.7 percent in 2016 from 6.9 percent in 2015.  Growth in the region excluding China was 4.6 percent in 2015, broadly unchanged from 2014, as weaker growth in commodity exporters, including Indonesia and Malaysia, was offset by growth acceleration in Vietnam and moderate recovery in Thailand. Risks include a faster-than-expected slowdown in China, the possibility of renewed financial market turbulence, and an abrupt tightening of financing conditions.

Europe and Central Asia: Growth is projected to rise to 3 percent in 2016 from 2.1 percent in the year just ended as oil prices fall more slowly or stabilize, the Russian Federation’s economy improves, and Ukraine recovers. Economic activity in Russia is projected to contract by 0.7 percent in 2016 after shrinking by 3.8 percent in the year just ended. Growth could resume modestly in the eastern part of the region, which includes Eastern Europe, South Caucasus, and Central Asia, if there is a stabilization of commodity prices. The western part of the region, which includes Bulgaria, Romania, Turkey and the Western Balkans, should grow moderately in 2016, buoyed by recovery in the Euro Area.

Latin America and the CaribbeanThe region is projected to recover modestly from recession in 2016, with activity flat after shrinking by 0.9 percent in the year just ended, as the region grapples with the protracted decline of commodity prices and domestic challenges weighing on the region’s largest economies.  However, there are differences among the sub-regions with stronger growth in developing Central and North America and the Caribbean offsetting weakness in South America.  The current recession in Brazil is expected to extend into 2016 but a return to growth is expected in 2017.  Although weighed down by low oil prices and associated fiscal pressures, growth is expected to pick up in Mexico thanks to dividends from implementation of structural reforms and strengthening demand from the U.S. market.

Middle East and North AfricaGrowth is forecast to accelerate to 5.1 percent in 2016 from 2.5 percent in the year just ended, as the expected suspension or removal of economic sanctions against the Islamic Republic of Iran will allow that country to play a larger role in global energy markets. Growth is expected to pick up in other oil exporters as well, predominantly on the assumption that oil prices will stabilize. The region is subject to serious risks from the possibility of an escalation of conflict, a further decline in oil prices, and failure to improve living conditions, which could spark social unrest.

Sub-Saharan Africa: The region is forecast to accelerate to 4.2 percent in 2016 from 3.4 percent in 2015 as commodity prices stabilize. Economic activity will vary across Sub-Saharan Africa, with consumption growth remaining weak in oil exporting countries as fuel costs rise, while lower inflation in oil importing countries helps boost consumer spending. Nigeria is forecast to expand 4.6 percent after growing by 3.3 percent last year while South Africa is expected to advance only modestly to 1.4 percent growth from 1.3 percent in the year just ended.

 

Leave a Reply

Your email address will not be published.