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The World Bank's Economic Forecast - 1/20/16

It’s still early in the year, but the World Bank has already cut its growth forecast for twenty sixteen.  Earlier this month, the World Bank announced that weak performance in several major emerging market economies has dampened optimism.  World output this year is expected to expand by 2.9 percent. 

While that would be better than the estimated two point four percent global growth that transpired last year, it would fall short of what had been predicted for twenty sixteen several months ago when the World Bank’s forecast stood at three point three percent.  During the World Bank’s prior forecast, the expectation was that the Russian and Brazilian economies would return to growth this year. 

Now the forecast is that both emerging economies will continue to shrink.  The outlook for Brazil has deteriorated with particular sharpness.  During the prior forecast, the World Bank projected Brazilian growth of one point one percent.  Now the forecast is that Brazilian output will shrink 2.5 percent this year after contracting nearly 4 percent last year. 

Among developed economies, the U.S. will continue to be among the better performers.  The World Bank expects that U.S. output will rise two point seven percent this year, which would be a bit better than last year’s performance.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.