World Bank on growth: It's worse than we thought

The World Bank has cut its forecast for global growth in 2013, blaming stilted economic recovery in developed countries.

by Michael Northcott
Last Updated: 19 Aug 2013

So, if you were hoping that company financial results and central bank outlooks would be a flurry of positivity at the start of 2013, think again. Now the World Bank has added to the pessimism, saying that a slower-than-expected recovery from the world’s more developed economies is putting the brakes on growth for the world as a whole.

In its bi-annual Global Economic Prospects report, it said that it expected total world economic growth in 2013 to reach 2.4%, down from the 3% it had been expecting when it published its last report in June.

The report did acknowledge that markets have calmed down a little, but said that this alone was not enough to push the world economy back into accelerating growth mode. It also said that the ongoing debate over US government budgets was damaging confidence elsewhere in the world and putting the brakes on investment. 

In its report, the Bank said: ‘What we are seeing is a recovery we anticipated in June being pushed a little further back in time, beginning closer to the end of the first quarter and into the second quarter of 2013, rather than beginning a little earlier," said the bank in its report.

It added: ‘You can keep markets calm for one or two years, but if this is not backed up with real growth you could get another round of financial risks coming in.

Meanwhile, even if you want to look at some other metrics to see how we’re doing, UK construction isn’t looking too healthy either. Industry lobbying group the Construction Skills Network has said in a report that it does not expect UK construction to return to its pre-recession peak until 2022. Although the good news from home builder Barrett today could suggest that there's a bit of light at the end of that particular tunnel.

The construction sector in the UK lost 60,000 jobs last year, and output fell by a massive 9% in the period, creating what the group described as ‘one of the most difficult periods since WWII’.

We promise, if any encouraging figures pop up anywhere, we’ll let you know. Nothing today though…

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