Growth of the global economy to slow down to 3.3% in 2011
Bulgaria’s GDP expected to increase by 2.5% according to World Bank forecasts
The global economy is heading towards a slower, but still solid and more sustainable growth, according to the World Bank 2011 Economic Prospects report. Global growth is expected to fall back from 3.9% in 2010 to 3.3% this year, before picking up to 3.6% in 2012.
World Bank Chief Economist, Justin Yifu Lin, explained the expected slowdown with the end of the term of state stimuli, introduced in 2010 to assist recovery from the deep recession. "With these, the world economy entered a new phase of recovery," Mr. Lin stated, quoted by DPA.
Developing countries which have returned to their levels of economic growth from prior the financial crises continue to be seen as the engine of recovery. The 2011 Global Economic Prospects report expects developing countries to expand by 6% this year and by 6.1% in 2012, compared to 7% in 2010.
Economic growth in East Europe and Central Asia will slow down in 2011 on the background of the high unemployment rate and indebtedness of households. World Bank experts forecast that the increase in the region’s GDP will slow down to 4% this year, compared to 4.7% in 2010, before picking up to 4.2% in 2012. During the credit crunch, the economies in East Europe which were reporting a higher economic growth than the western countries over the last decade, underwent through one of their biggest depressions for the past 20 years. The recovery which began last year will slow down because West European countries are buying less goods from the East due to the debt crisis.
The report says that production in Bulgaria, Kyrgyzstan, Lithuania and Romania has stagnated and even decreased, and the expected growth in the volume of the economy in these countries will be only 2% in 2011 and 3.3% in 2012. Bulgaria will report a 2.5% GDP growth this year and a 2.7% increase in 2012. Thus, the World Bank becomes yet another institution predicting more conservative expectations for Bulgaria’s GDP than the budget forecast. According to the Cabinet’s financial plan, our economy will report a 3.6% economic growth this year. Fitch ratings forecasts a 2.5% growth, the European Commission - 2.6%, EBRD - 2.4%, and IMF - between 2% and 2.5%. According to the World Bank, our northern neighbour Romania will recover at an even slower pace, with a 1.5% economic growth.
Text source and photo: klassa.bg
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