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Shift to sustainable growth policies – World Bank tells developing countries

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The World Bank has advised developing countries to move away from crisis-fighting attitude to policies that will tackle specific challenges to sustain growth.

In its June 2011 edition of the Global Economic Prospects which was released today June 7, 2011, the World Bank said “developing countries need to focus on tackling country-specific challenges such as achieving balanced growth through structural reforms, coping with inflationary pressures, and dealing with high commodity prices.”

According to the Bank, on the contrary, prospects for high-income countries and many of Europe’s developing countries remain clouded by crisis-related problems such as high unemployment, household and banking-sector budget consolidation, and concerns over fiscal sustainability among other factors.

In the report, the World Bank projects that as developing countries reach full capacity, growth will slow from 7.3% in 2010 to around 6.3% each year from 2011 to 2013.

High-income countries, the Bank says will see growth slow from 2.7% in 2010 to 2.2 percent in 2011 before picking up to 2.7% and 2.6% in 2012 and 2013 respectively.

Justin Yifu Lin, the World Bank’s Chief Economist and Senior Vice President for Development Economics said “Globally, GDP is expected to grow 3.2% in 2011 before edging up to 3.6% in 2012,” adding, “but further increases in already high oil and food prices could significantly curb economic growth and hurt the poor.”

 

By Ekow Quandzie

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