The World Bank Group trimmed its global growth forecast for 2019 and 2020, saying that while the economy is headed for a modest rebound this year, the outlook remains fragile amid persisting headwinds.
Economic growth for 2019 is now estimated at 2.4%, marking the slowest pace of expansion since the global financial crisis, the World Bank said in its semi-annual Global Economic Prospects report. Growth is forecast to slightly pick up to 2.5% in 2020 and gradually firm before reaching 2.7% in 2022. The revised forecasts represent a 0.2-percentage-point cut from the World Bank's previous estimates for 2019 and 2020.
The World Bank warned against persisting downside risks such as renewed trade tensions, marked weakness in advanced economies and financial disruptions in emerging market and developing countries.
"The materialization of these risks would test the ability of policymakers to respond effectively to negative events. Associated policy challenges are compounded by high debt levels and subdued productivity growth," the financial institution said.
Growth in advanced economies is projected to ease to 1.4% in 2020 from an estimated 1.6% in 2019. The deceleration is partly due to a continued weakness in the manufacturing sector.
Growth in emerging markets and developing economies is forecast to reach 4.1% this year compared with an estimated 3.5% for 2019.
The Chinese economy is forecast to grow at a rate under 6% through 2022 from an expected 6.1% expansion last year. The U.S., meanwhile, will grow at a rate of under 2% over the same period following a 2.3% rise in 2019.