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Global Economic Prospects

World Economy in 2014: Troubling Stagnant Growth

Jim Yong Kim's picture
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A major World Bank Group report this week found that growth is stagnating in developing countries. It’s projected to be below 5 percent for the third straight year. That’s too modest to create the kind of jobs we need to improve the lives of the poorest people around the world.

If this trend continues, it will have long-term negative implications on developing countries, including the loss of an historic opportunity to end extreme poverty in the next generation. Millions of people around the world have been able to escape poverty over the last few decades largely because of high economic growth in developing countries.

The Global Economy Without Steroids

Sri Mulyani Indrawati's picture
Economic growth is back. Not only are the United States, Europe, and Japan finally expanding at the same time, but developing countries are also regaining strength. As a result, world GDP will rise by 3.2% this year, up from 2.4% in 2013 – meaning that 2014 may well be the year when the global economy turns the corner. The fact that advanced economies are bouncing back is good news for everyone.

The Long-Stalled World Economy Shifts into Gear

Jim Yong Kim's picture



The global economy is finally emerging from the financial crisis. Worldwide, growth came in at an estimated 2.4 percent in 2013, and is expected to rise to 3.2 percent this year. This improvement is due in no small part to better performance by high-income countries. Advanced economies are expected to record 1.3 percent growth for the year just finished, and then expand by 2.2 percent in 2014. Meanwhile, developing countries will likely grow by 5.3 percent this year, an increase from estimated growth of 4.8 percent in 2013.

The world economy can be seen as a two-engine plane that was flying for close to six years on one engine: the developing world. Finally, another engine – high-income countries – has gone from stalled to shifting into gear. This turnaround, detailed in the World Bank’s Global Economic Prospects 2014 launched last Tuesday, means that developing countries no longer serve as the main engine driving the world economy. While the boom days of the mid-2000s may have passed, growth in the emerging world remains well above historical averages.

High-income countries continue to face significant challenges, but the outlook has brightened. Several advanced economies still have large deficits, but a number of them have adopted long-term strategies to bring them under control without choking off growth.