The World Bank is now predicting that the global economy will grow by 3 percent this year and 3.3 percent in 2016. The latest forecast is down from earlier estimates released last June that had the bank predicting global growth would hit 3.4 percent in 2015 and 3.5 percent in 2016.
“The lower oil price, which is expected to persist through 2015, is lowering inflation worldwide and is likely to delay interest rate hikes in rich countries,” said Kaushik Basu, chief economist at the World Bank. “This creates a window of opportunity for oil-importing countries, such as China and India.”
On the other hand, falling oil prices will likely hurt growth in export countries like Russia. The bank is predicting the Russian economy will contract by 2.9 percent in 2015 and grow by just 0.1 percent in 2016. Meanwhile, the US and UK economies are “gathering momentum”, according to the bank, but recovery efforts in the eurozone have been “sputtering.” The bank is predicting that the eurozone economy will grow by 1.1 percent in 2015 and 1.6 percent in 2016-17.
