6/9/2016
World Bank, Global Economic Prospects
World Bank Development Expectations Group Director Köse, "Unfortunately, World economy still try to get out of the impacts of the financial crisis, however, still face with other shocks such as sharp decrease in good prices. There is still a very huge debt burden that came along with the crisis and this burden still adversely affect consumption and investments in many countries. The fertile ground for financial and monetary policies to be executed for revitalizing the economy is extremely narrow."
World Bank has released June 2016 issue of "Global Economic Prospects" (GEP). In the report, global growth ratio in 2016 is envisaged to be 2.4%, 0.5 below of January expectations, no different from that of dissappointing growth ratio of last year. According to the Report, growth will be moderate in developed countries again. Emerging markets and developing countries will still face with risks. Exporters continue to struggle with low good prices however, importers will be more resistant. In Global Economy, downward risks are frequently talked about since the beginning of year and political uncertainties increased as well. World Bank has put emphasize on the necessity of structural reforms that have to be realized for improving the growth. Global growth expectations for 2016 have been decreased to 2.4% from 2.9%, for 2017 to 2.8% from 3.1% and for 2018 to 3% from 3.1%. 2016 growth estimation on developed countries was drawn to 1.7% by the World Bank, these countries are foreseen to grow by 1.9% in 2017 and 2018. World Bank has drawn growth estimation for the USA this year to 1.9% from 2.7%. Growth estimation for next two years are respectively revised to 2.2% from 2.4% and to 2.1% from 2.2%. In Euro Zone, growth expected to be 1.6% in 2016 and 2017 and 1.5% in 2018. In the report, it is noted that each of these figures are 0.1 lower than that of the previous report. Growth estimations for emerging markets and developed countries (EMDEs) decreased to 3.5% from 4.1% for 2016, to 4.4% from 4.7% for 2017 and to 4.7% from 4.9% for 2018. World Bank has not changed 2016 and 2017 growth expectation for Turkey in the Report. Accordingly, Turkey will grow 3.5% in 2016 and 2017. For 2018, growth estimation for Turkey has been increased to 3.6% from 3.4%. World Bank Group Director Jim Yong Kim World Bank Group Director Jim Yong Kim has commented on the report as "Economic growth is the main element in decreasing the poverty, for this reason, we are extremely concerned on sharp slowing of growth in good exporter countries as the result of lower good prices". World Bank Development Expectations Group Director Ayhan Köse World Bank Development Expectations Group Director Ayhan Köse has made an announcement after the release of World Bank "Global Economic Expectations" report. Köse has told that one of the most important reasons of the weak growth was the world economy could not get rid of the impacts of the financial crisis experienced in 2007-2009 period, and said, "Unfortunately, World economy still try to get out of the impacts of the financial crisis, however, still face with other shocks such as sharp decrease in good prices. There is still a very huge debt burden that came along with the crisis and this burden still adversely affect consumption and investments in many countries. The fertile ground for financial amd monetary policies to be executed for revitalizing the economy is extremely narrow". "Very slow growth of the World economy, makes it extremely fragile" Communicating the expansion of the global economy at this rate, which already receded 2.4% last year and experienced the lowest performance since 2009 is of high concern, Köse said, "Global economy grows 2.4%, this is a low performance. Such low growth rate of the World economy, at a period when downward risks increase rapidly, makes it to be further fragile. Such fragility comes out at a period when the room for using the instruments of policy makers is narrowed. If world economy face with a great shock a very serious stagnation may start". Köse has further noted that sharp decrease of good prices at this point have seriously affected the growth figures particularly of good exporter countries, and underlined that World Bank has reduced growth estimation for good exporter developing countries to 0.4% from 1.6% for 2016. "Turkey’s growth will be around 3.5%" Köse has also dwelt upon Turkey economy and said, "In Turkey, particularly preserving a strong consumption in Turkey lead us to maintain our growth estimation to be the same. We expect Turkey’s growth this year to be about 3.5%. Decrease in oil prices decreased some of the fragilities in the economy. We observe this positive impact on inflation figures and foreign trade deficit. We expect the growth about 3.5% to be maintained in next year as well provided that prevailing external conditions go on positively, the domestic shocks and uncertainties decrease, economic reforms and correct financial and monetary policies pursued. However, Turkey economy may be affected from external shocks as other emerging markets, for this reason has to be prepared against such possibilities".
Köse has noted that US Central Bank (Fed) tries hard for reading the country economy, "Fed has tried to direct the market in an extremely cautious way until now and been sucessful. Fed closly consider the developments in the world economy and their impact on the US economy particularly in recent one year".
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