World Bank cuts 2016 global economic forecast, outlook more pessimistic than the IMF

The World Bank has slashed its 2016 global economic forecast by 0.5 per cent to 2.4 per cent citing mediocre growth in advanced economies. The World Bank's latest 2016 forecast is more pessimistic than the IMF's outlook. The IMF said in April that GDP growth would edge up slightly this year to 3.2 percent, from 3.1 percent in 2015, which many analysts said was an overoptimistic estimate.

The World Bank said low commodity prices, weak global trade and stilted capital flows will weigh on global economy. The bank expects developing and emerging market economies as a group to grow 3.5 percent this year, down from the 4.1 percent it forecast in January and barely changed from last year's 3.4 percent.

According to the World Bank, US economy will grow at 1.9 percent this year, down from 2.4 percent in 2015, the eurozone will grow 1.6 percent, the same as last year, Japan will expand 0.5 percent, a bit slower than last year, Latin America will shrink 1.3 percent this year after sliding 0.7 percent in 2015. Notably, the World Bank left its forecast for China's economic growth unchanged at 6.7 percent.

Jim Yong Kim, the bank’s president, warned that a vote by Britons to leave the EU would further undermine confidence in global trade and hit growth, rebounding on economies such as the UK that rely on exports to drive growth.