The World Bank, which focuses on alleviating poverty, announced Tuesday that it is upping its expectations for global growth based on economic improvements in countries like the United States. Its forecast now is the first in three years to see improvement and bodes well for international economic recovery.
“For the first time in five years, there are indications that a self-sustaining recovery has begun among high-income countries — suggesting that they may now join developing countries as a second engine of growth in the global economy,” Kaushik Basu, chief economist at the World Bank, said to Reuters.
But despite the overall improvement, developing countries showed less encouraging results. The World Bank dropped its growth expectations from 5.6 percent in June to 5.3 percent for this year. Growth has been poor in developing countries following the financial crisis in 2008, before which Reuters reports growth hit a rate of 7.5 percent.
Still, some say the reduced growth rate in emerging markets isn’t all bad news. “We’re moving into a new phase where developing countries are growing at a rate much closer to their underlying sustainable rate of growth,” Andrew Burns, the author of the World Bank’s Tuesday report, told Reuters. Some countries, like the United States, are becoming better able to step back from recovery measures due to improvement in the world economy — for example, the reduction in the Federal Reserves quantitative easing program.
Other countries or economic regions, like the eurozone, are still watching closely in case low inflation forces the European Central Bank to step in and affect change. Greece is also looking for economic aid from the eurozone should its progress in 2014 prove sufficient to earn a hand with its heavy debt load — likely with interest rate changes rather than with debt surgery.