The World Bank Group expects global economic growth to cool to 2.9% in 2019 from a downwardly revised 3% in 2018 as trade tensions persist and financial conditions in some large emerging economies continue to face headwinds.
The 2019 forecast is 0.1 percentage point lower than the World Bank's previous projection in June 2018, when it had also expected 2018 growth to reach 3.1%. Growth in advanced economies is still anticipated to drop to 2% in 2019 from an expected 2.2% in 2018, the institution said in its latest Global Economic Prospects report.
Growth in emerging market and developing economies is expected to hit 4.2% in 2018 and the following year amid rising downside risks, down 0.3 percentage points and 0.5 percentage points, respectively, from the World Bank's June forecast. Stronger tightening in borrowing costs and past increases in public and private debt are likely to weigh on financing conditions in many emerging markets, while rising trade tensions may disrupt global value chains and weaken global growth.
"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead," World Bank CEO Kristalina Georgieva said.
Economic growth in China is expected to ease to 6.2% in 2019 from 6.5% in the previous year amid domestic and external rebalancing, while the rest of East Asia and Pacific region is likely to register economic growth of 5.2% this year.
Europe and Central Asia are anticipated to continue feeling the heat from Turkey's financial woes as economic growth in the region is anticipated to slip to 2.3% this year from 3.1% in 2018.
Among advanced economies, real GDP growth is forecast to dip to 2.5% in the U.S. and 1.6% in the eurozone this year, from 2.9% and 1.9%, respectively, in 2018. The Japanese economy is expected to expand by 0.9% in 2019, compared with an expected 0.8% growth in the previous year.