A frustratingly slow recovery in developed nations is holding back the global economy, according to the World Bank.
It has dramatically cut its outlook for 2013 and warned that developing countries could suffer fallout from problems in Europe and the United States.
Jim Yong Kim, World Bank President said: “Despite, promising and sometimes even courageous measures taken in Europe, their issues remain in the Eurozone and of course we still have fiscal policy issues in the United States. The risks from this situation are substantial, especially for developing countries that have remained remarkably resilient thus far.”
The World Bank also cut its forecast for developing countries, which last year grew at their slowest pace in a decade, to 5.5 percent in 2013 from 5.9 percent in the June forecast.
It has advised developing nations to focus on structural policies and investments to support sustained growth.
Meanwhile, the World Bank said a decline in China’s unusually high investment rate was not likely to affect global growth over the medium to long term, but warned that a sharp decline could have domestic and global consequences.