Global Economics Prospects Report

Global Economics Prospects Report

The World bank has recently released the January edition of its biennial Global Economics Prospects report.

Key Highlights of the Report

Global Economics Prospects Report

  • Global Forecast:
    • Inflation: It is expected to slow down to an average rate of 2.7 per cent in 2025 and 2026, close to many central bank targets from over 8 per cent two years ago
    • Steady but Subdued Growth: The world economy will expand to 2.7 per cent in 2025 and again in 2026 showing a lackluster growth. 
      • Growth is running 0.4 percentage points below the 2010-2019 average which is insufficient to tackle poverty.
    • Risk: The global economy is facing downside risks such as adverse policy shifts and heightened policy uncertainty, growing trade fragmentation, slowing progress in reducing inflation, and weaker activity in major economies. 
  • Developing Economies Growth:
    • Rate: For low and middle-income developing countries, growth is expected to come in at 4.1 per cent this year and slow slightly to 4 per cent in 2026.
    • Decelerating Growth: The Developing nations excluding China and India, has shown a decelerating trend from a robust average of 5.9 per cent a year in the 2000s to just 3.5 per cent in the 2020s. 
    • Negative Externalities: Developing economies are prone to sluggish investment, high levels of debt, the increasing costs of climate change and growing protectionism hurting exports.
  • Low Income Economies Growth: The bank expects low-income countries growth to rebound to 5.7 per cent this year and 5.9 per cent in 2026 due to easing of conflict in some places.
  • Third World Countries: The world’s poorest countries with per-person annual incomes below USD 1,145 grew just 3.6 per cent in 2024.
    • Reason: The main reason being escalating conflict and violence in these economies (Gaza and Sudan)  and lingering damage from the adverse shocks like  COVID-19 and Russia’s invasion of Ukraine.
  • On India:  India  is expected to see a 6.7 per cent expansion both in 2025 and 2026 and has supplanted China as the world’s fastest-growing major economy.
    • Reason: The growth of demand in rural areas, a recovery in farm production has boosted consumer spending though inflation and slow lending growth have discouraged shoppers in cities.

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World Bank

  • Establishment: The World Bank was established in 1944 to help rebuild Europe and Japan after World War II.
    • It is one of the five institutions created at Bretton woods in 1944 and is affiliated to the United Nations.
  • Membership: It has 189 member countries
    • India is a founding member.
  • Institution: World Bank comprises of five institutions:
    • International Bank for Reconstruction and Development (IBRD): It provides commercial or concessional loans to only sovereign states or projects backed by sovereign states.
    • International Development Association (IDA): It helps the world’s poorest countries and aims to reduce poverty by providing interest-free loans (called IDA Credits)
    • International Finance Corporation (IFC): It finances the private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.
    • Multilateral Investment Guarantee (MIGA): It promotes foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, and improve people’s lives.
    • International Centre for Settlement of Investment Disputes (ICSID): The world’s leading institution devoted to international investment dispute settlement.
  • Key Reports:
    • Global Financial Development Report; Commodity Markets Outlook; World Development Reports

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Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

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