Noting that the global economy is still struggling to gain momentum while many developing economies are less dynamic than in the past, the World Bank has projected it to expand by three per cent this year.
The global economy grew by an estimated 2.6 per cent in 2014, and is projected to expand by 3.3 per cent in 2016 and 3.2 per cent in 2017, the bank said in a report titled ‘Global Outlook: Disappointments, Divergences, and Expectations Global Economic Prospects'.
Developing countries grew by 4.4 per cent in 2014 and are expected to edge up to 4.8 per cent in 2015, strengthening to 5.3 per cent and 5.4 per cent in 2016 and 2017, respectively, it said.Following another disappointing year in 2014, developing countries should see an uptick in growth this year, boosted in part by soft oil prices, a stronger US economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets, it added.
"In this uncertain economic environment, developing countries need to judiciously deploy their resources to support social programs with a laser-like focus on the poor and undertake structural reforms that invest in people," said World Bank President Jim Yong Kim.
"It's also critical for countries to remove any unnecessary roadblocks for private sector investment. The private sector is by far the greatest source of jobs and that can lift hundreds of millions of people out of poverty," he added.
Underneath the fragile global recovery lie increasingly divergent trends with significant implications for global growth, the World Bank said in its report.
Activity in the United States and the United Kingdom is gathering momentum as labour markets heal and monetary policy remains extremely accommodative.