World Bank downgrades growth outlook

In its Global Economic Prospects report, the World Bank downgraded the outlook for global economic growth and now expects the world economy to grow by 2.8%, 0.2 percentage points slower than its January forecast. The bank says global growth in 2016 will reach 3.3%, presuming that recoveries in the euro zone and Japan take hold. “We at the World Bank have just switched on the seat belt sign,” Kaushik Basu, the World Bank chief economist said in a press conference in Washington. “If I were advising the US Fed, I would recommend that (higher rates) happen next year instead of late this year,” he said. “My own concern is that a relatively early move (in rates) could cause an exchange rate movement, strengthening of the dollar, which will not be good for the U.S. economy and have negative repercussions for other countries,” he said.