World Bank Rules Out Significant Changes in Global GDP Forecasts

The World Bank doesn’t expect major changes in its global growth forecast even as advanced economies improve and emerging markets adjust to a reduction in U.S. stimulus, Managing Director Bertrand Badre said.

“Don’t expect significant changes in the forecast,” Badre said in an interview in Singapore today, before the bank’s next global update due this month. “I think we will not change significantly our global growth prospects, but the rebalancing is going on.”

The Washington-based lender said in January it sees the world economy expanding 3.2 percent this year, compared with a June 2013 projection of 3 percent. Developed nations are doing better even as U.S. growth was curbed by harsh winter weather, while Europe grapples with low inflation, Badre said.

Emerging markets like Indonesia have taken steps including raising interest rates and cutting fuel subsidies to address the impact of the tapering, he said.

“So countries have started to react, so the situation now is much better handled,” Badre said. “Not everybody has handled it properly, but at least things are moving in the right direction.”

It’s too early to say if Europe is on the verge of deflation, Badre said. “But this is something that needs to be very much taken care of.”

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