WASHINGTON—The World Bank has cut its forecast for global growth this year given weakness in the developing world.
The aid agency said Wednesday that it expects the world economy to expand 2.9 percent in 2016, down from the forecast of 3.3 percent it made in June. The global economy grew 2.4 percent in 2015.
Several big developing economies—including Brazil and China—are slowing or shrinking. Their troubles have disproportionately hurt their smaller trading partners, which have also been squeezed by depressed commodity prices.
The World Bank expects developing countries to collectively grow 4.8 percent, up from a six-year low 4.3 percent in 2015. China, the world’s second-biggest economy, is expected to register 6.7 percent growth, down from 6.9 percent in 2015 and the slowest pace since 1990.
The economic prospects of advanced economies appear to be brightening as the developing world struggles. The World Bank expects the U.S. economy to grow 2.7 percent this year, up from 2.5 percent in 2015 and the fastest pace since 2006.
The agency foresees the 19-country eurozone economy expanding 1.7 percent, up from 1.5 in 2015 and fastest since 2011. And it expects the Japanese economy, lifted by the Bank of Japan’s easy-money policies, to grow 1.3 percent, up from 0.8 percent in 2015.
Since the 2008 financial crisis and the Great Recession, the World Bank, the International Monetary Fund and others have frequently overestimated the strength of the world economy and have later had to downgrade their initial predictions.
