Resilient emerging markets are cushioning the global economy amid the US slowdown, according to the World Bank.
In its Global Economic Prospects 2008 publication, the World Bank notes real GDP growth in developing countries is expected to be to 7.1% in 2008, compared to just 2.2% in high-income countries.
Global growth fell from 3.9% in 2006 to 3.6% last year, and is expected to be 3.3% in 2008.
The World Bank says market volatility, the weak US dollar and recession fears are currently casting shadows over the world economy.
But robust developing country growth, led by high commodity prices, has benefited many commodity exporters and driven growth in poorer countries.
“Looking at trade, strong import demand across the developing countries is helping to sustain global growth," World Bank global trends team manager Hans Timmer says.
“As a result and given a cheaper US dollar, American exports are expanding rapidly. This is helping shrink the U.S. current account deficit and is contributing to a decline in global imbalances.”
The World Bank expects credit turmoil in international markets will persist until late 2008 at least.
“We expect developing-country growth to moderate only somewhat over the next two years,” said World Bank development prospects group and international trade department director Uri Dadush.
“However, a much sharper United States slowdown is a real risk that could weaken medium-term prospects in developing countries.”
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