World Bank expects slower, more "mature" growth in 2011

Jan 12, 2011, 0:02 GMT

Washington - The World Bank on Wednesday predicted the world economy's growth rate will slow this year after a more solid rebound from recession in 2010.

Chief economist Justin Lin said the slowdown was to be expected after many countries released some pent-up demand and implemented public stimulus measures in 2010 to pull their economies out of deep recession in 2008-09.

'The world economy has entered into the new phase of recovery,' Lin told reporters at the World Bank headquarters in Washington. 'We went through this bounce-back phase, to a more mature growth phase.'

In an updated economic forecast, the World Bank said it expected global growth to average 3.3 per cent in 2011 and 3.6 per cent in 2012, after growing an estimated 3.9 per cent in 2010.

The recovery remains led by emerging and developing powers, which Lin said had returned to levels of growth seen before the 2008 financial crisis. Developing countries will expand 6 per cent this year and 6.1 per cent in 2012, compared to 7 per cent in 2010.

Lin warned that fallout from the euro-zone's debt crisis, rising food prices or overly aggressive investment from abroad could all 'derail or slow down the recovery' in poorer countries if left unchecked.

China surged ahead by 10 per cent in 2010, and the wider Asian and Pacific region led all parts of the world with a growth rate of 9.3 per cent. That was forecast to slow to a still-strong 8 per cent in 2011.

The World Bank said wealthier countries by contrast were still not growing fast enough to reduce unemployment, which has remained high even as the rich world emerged from recession last year.

Advanced economies will grow 2.4 per cent in 2011, after expanding 2.8 per cent last year.