The aid agency predicted Tuesday that the world economy will expand 2.4 percent this year, down from the 2.9 percent it expected in January and unchanged from a tepid 2015.
The World Bank is revising its 2016 global growth forecast down to 2.4 percent from the 2.9 percent pace projected in January. The move is due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows. Commodity-exporting emerging market and developing economies have struggled to adapt to lower prices for oil and other key commodities. Growth in these economies is projected to advance at a meager 0.4 percent pace this year, whereas growth in commodity importers has been more resilient. Projections are subject to substantial downside risks, including additional growth disappointments in advanced economies or key emerging markets and rising policy and geopolitical uncertainties
"The global economy is fragile," said World Bank economist Ayhan Kose, who helped produce the forecast. "Growth is weak."
In Thailand, growth is expected to strengthen gradually as investor confidence returns, but is likely to remain below 3 percent in 2016-18, reflecting weak global trade.
China central bank sticks to 2016 growth forecast of 6.8 percent despite weak exports
China's central bank said on Wednesday it still expects the economy to grow by 6.8 percent this year, with fixed-asset investment expected to grow more strongly than it expected earlier, helping to offset shrinking exports.
The People's Bank of China (PBOC) also said bond default risks could rise amid deleveraging and government plans to slash overcapacity, and that could affect companies' ability to raise funds.
"Since the beginning of this year, the global and domestic economic environment has experienced a number of changes," the PBOC said in a mid-year work report.
"Reflecting these recent developments, we revised our China macroeconomic forecasts for 2016. Compared with our published forecasts in December last year, we maintain our baseline projection of 2016 real GDP growth at 6.8 percent."
The PBOC also said it expected consumer price inflation to be 2.4 percent this year, up by 0.7 percentage points from its earlier forecast and signalling that deflationary pressures seen in 2015 were easing.
China's economy grew 6.7 percent in the first quarter, its slowest pace in seven years.
China's exports tumble again in May as global demand stays weak
That left Beijing with a trade surplus of $49.98 billion, wider than April's $45.56 billion reading but missing Reuters' $58billion forecast.
For the first five months of the year, annual exports were 7.3 percent lower while imports were down 10.3 percent.
Softening global demand was to blame for weak exports instead of domestic factors, Julian Evans-Pritchard, China economist at Capital Economics said in a note, pointing to poor demand in many of China's key trading partners, including the U.S., the EU and Japan.
He attributed the better-than-expected imports figure to the ongoing recovery in global commodity prices that boosted import values.
In yuan terms, May trade data painted a different picture, with exports up 1.2 percent on-year and imports 5.1 percent higher.
The divergence with dollar figures reflected the interruption of the renminbi's long-term appreciation trend against the dollar, said Thierry Apoteker, executive chairman and chief economist at TAC Economics.
"China has been losing worldwide market share on manufactured products for a while... if worldwide trade in dollar terms is zero, China is at minus 4. This is no surprise because most competitors have had their currency depreciating by 20-25 percent since 2013, but the yuan has remained broadly stable, with depreciation only beginning since July 2015."
Oil prices march past $50 amid signs of U.S. inventory falls
Crude oil prices scaled beyond the $50 mark early Wednesday, as supply disruptions in Nigeria and likely declines in the U.S. crude inventories and production fuelled bullish sentiment.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July CLN6, +0.18% traded at $50.52 a barrel, up $0.16, or 0.3%, in the Globex electronic session, after settling above $50 for the first time since July. August Brent crude LCOQ6, +0.02% on London’s ICE Futures exchange was up $0.10, or 0.2%, to $51.54 a barrel.
The jump is largely driven by the ongoing supply disruption in Nigeria, where militant group Niger Delta Avengers has vowed to shutter the country’s oil operation. Multiple attacks on key pipelines and facilities have reduced Nigeria’s daily oil output to around 1 million barrels.
Production in the U.S. has also waned on reduced investments. The Energy Information Administration said in its short-term energy outlook Tuesday that domestic crude production fell by 250,000 barrels a day in May from April, the biggest one-month decline in years.
Investors are also cheered by reports that U.S. crude stocks might have ebbed further last week. A survey by The Wall Street Journal shows U.S. crude stockpiles fell by 3.1 million barrels last week, while gasoline inventories fell by 500,000 barrels and stocks of distillates, fell by 300,000 barrels.
Data by American Petroleum Institute for the week ended June 3 indicates crude supplies decreased by 3.6 million barrels. Official EIA data will be released later today.
MarketWatch
Reference: Reuters,ASSOCIATED PRESS, World Bank,CNBC,MarketWatch
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