June 2015: The World Bank Group has issued the June edition of its Global Economic Prospects report. The report notes that global growth is expected to be 2.8% in 2015 before strengthening moderately to 3.2% in 2016–2017. It also indicates that developing country growth has been revised downward to 4.4% in 2015 due to falling commodity prices, the stronger dollar, and tightening financial conditions, but is “expected to pick up momentum” and reach 5.3% in 2016-2017.

Titled ‘The Global Economy in Transition,’ the report outlines that many developing country currencies have weakened against the U.S. dollar, particularly those of countries with weak growth prospects or elevated vulnerabilities.

It shows that lower oil prices are having an increasingly pronounced impact. In oil-importing countries, “the benefits to activity have so far been limited, although they are helping to reduce vulnerabilities”, while in oil-exporting countries, “lower prices are sharply reducing activity and increasing fiscal, exchange rate, or inflationary pressures”, the authors say.

The report is divided in two chapters. the first chapter focuses on the global level and includes information on: recent developments and outlook in major economies and in developing countries; global trends and spillovers; and risks and policy challenges. It observes, inter alia, that oil-importing countries have the opportunity to reform energy subsidies and taxes, and to build fiscal space. The second chapter focuses on regional outlooks and comprises sections on recent development, outlook, risks and policy challenges. It covers East Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, South Asia, and Sub-Saharan Africa.

The report also includes two Special Feature sections. The first analyzes the risks around the US rate liftoff (a series of US rate increases) and policy options. It notes that the liftoff or subsequent rate increases could, for instance, prompt a spike in US long-term interest rates, and a sharp increase in borrowing costs for emerging markets.

The other one explores: the role of the commodity boom over the past decade in metal and mineral exporting low-income countries; what the recent decline in commodity prices may imply for growth in these economies; and the recent economic developments and prospects for near-term growth in low-income countries.

The Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on developing countries. It is issued in January and June of each year. The January edition includes in-depth analyses of topical policy challenges faced by developing countries, while the June edition contains shorter analytical pieces. [Publication: Global Economic Prospects: The Global Economy in Transition]