6 January 2016: The World Bank advised developing countries to brace for shocks as the emerging economies of Brazil, Russia, India, China and South Africa (BRICS) experience slower growth, lower commodity prices and diminished trade, resulting in spillover effects for the rest of the world economy. Low-income countries (LICs) are expected to grow more robustly, however.

In its ‘Global Economic Prospects’ report of January 2016, the Bank anticipates modest pick-up from global growth of 2.5% in 2015 to 2.9% in 2016, rising to 3.1% in 2017-18. In a foreword to the report, Chief Economist Kaushik Basu states that the global economy must adapt to a new period of more modest growth in large emerging markets. He proposes that developing countries build resilience by boosting government spending, lowering interest rates, increasing workforce participation and undertaking governance reforms.

The report discusses the potential impacts of the Trans-Pacific Partnership (TPP), which the authors say could raise member countries’ GDP by an average of 1.1% by 2030, and could promote trade as long as it does not have “overly restrictive” requirements.

The report includes a ‘Special Focus’ section on moving from commodity discovery to production in LICs. The authors anticipate robust growth of about 5% in LICs in 2016, based on the agriculture and mining sectors. They discuss the value of shortening lead times for production of commodities such as gold, copper, zinc, nickel and lead, through reducing regulatory hurdles, clarifying legislation and strengthening infrastructure.

The report provides regional outlooks for: East Asia and Pacific, Latin America and Caribbean, South Asia, Europe and Central Asia, Middle East and North Africa, and Sub-Saharan Africa. [World Bank Press Release] [Publication: Global Economic Prospects: Spillovers amid Weak Growth] [World Bank Publications]