2019 Global Economic Outlook: World Bank Report

The World Bank released its 2019 Global Economy Outlook in January this year. In this post I try to highlight the key facts and information from their press released and patially from the report as well.

Global Summary

  • International trade and manufacturing activity have slowed down.
  • Intensifying trade tensions could result in even weaker global growth and disrupt global interconnected value chains.
  • Borrowing costs for emerging and developing economies have increased.
  • Uprising in commodity exporters has stagnated and activity in commodity importers is decelerating.
    • Energy prices have fluctuated, mainly due to supply factors.
    • Other commodity prices have also weakened – particularly metals – posing further challenges to commodity exporters.
  • Past increases in public and private debt could heighten vulnerability to swings in financing conditions.
    • Debt vulnerability (debt-to-GDP ratio) is rising in low-income countries.
  • Maintaining low global inflation may become a challenge as long-term factors that helped reduce inflation in past decades may lose momentum.
East Asia and Pacific remains one of the world’s fastest developing regions. Regional growth expected at 6% in 2019.
  • China 6.2%
  • Indonesia 5.2%
  • Thailand 3.8%
Europe and Central Asia. Financial stress in Turkey is weightening down regional growth, expected at 2.3% in 2019.
  • Turkey 1.6% (due to high inflation, high interest rates and low market confidence)
  • Poland 4%
Latin America and Caribbean. Regional growth is expected at 1.7% in 2019.
  • Brasil 2.2% (assuming fiscal reform is quickly put in place).
  • Mexico 2%
  • Argentina -1.7% (as deep fiscal consolidation leads to loss of employment and reduced consumption and investment)
Middle East and North Africa. Regional growth expected to rise to 1.9% in 2019. Domestic factors such as policy reforms are promoting growth in the region. Oil exporters expected to pick up slightly and GCC countries expected to grow 2.6%.
  • Iran -3.6% (due to sanctions)
  • Algeria 2.3%
  • Egypt 5.6% (as investments is supported by reforms and consumption picks up)
South Asia. Regional growth expected to accelerate tp 7.1% in 2019, by strenghtening investment and robust consumption.
  • India 7.3%
  • Pakistan 3.7%
  • Sri Lanka 4%
  • Nepal 5.9%
Sub-Saharan Africa. Regional growth expected to accelerate to 3.4% due to diminished policy uncertainty.
  • Nigeria 2.2% (assuming that oil production will recover)
  • Angola 2.9% (assuming that oil sector recovers)
  • South Africa 1.3% due to constraints on domestic demand and unlimited government spending.

The United States remains stable due to fiscal stimulus and better than expected domestic deman, with GDP growth projected at 2.9% in 2019. Growth in the European Union, on the other hand, is weaker than expected at 1.6%, due to slowing exports and as monetary stimulus is withdrawn.

Source: World Bank Press Release

Accession of the Russian Federation to the World Trade Organization

Russia’s accession to the WTO cleared a major hurdle when the WTO Working Party on its accession approved, ad referendum on 10 November 2011, the package spelling out Russia’s terms of entry to the organization. The Working Party will now send its accession recommendation to the 15 – 17 December Ministerial Conference, where Ministers are expected to approve the documents and accept Russiaas a WTO Member. [1]

All unrestricted WTO documents on accession of Russian Federation.

As part of the accession accord, Russia has agreed to undertake a series of important commitments to further open its trade regime and accelerate its integration in the world economy. The deal offers a transparent and predictable environment for trade and foreign investment.

From the date of accession, the Russian Federationhas committed to fully apply all WTO provisions, with recourse to very few transitional periods (see details below). The Russian Federation’s commitments will include the following:[2]

  • Market access for goods
  • Market access for services
  • Export duties
  • General commitments on market access
  • Industrial and agricultural subsidies
  • Pricing of energy
  • Sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT)
  • Trade-related investment measures
  • Protection of trade-related intellectual property
  • Transparency
  • Functioning of the Custom Union betweenRussia,KazakhstanandBelarus

There is considerable concern about the disparity in incomes in Russia. The richest Russian regions are 67 times richer than the poorest Russian regions in nominal terms and 33 times richer when price differences between the regions are taken into account (World Bank, 2005). The richest regions include the European North, Moscowand the resource rich regions of Siberia and the Far East. The poorest regions include the North Caucuses, Southern Siberia and Central Russia.[3]

All text is reposted Ipsis litteris from its official sources for information purposes only.