The World Bank has predicted that the global economic growth could slow down to 2.9 per cent from 3 per cent as had been previously predicted.
According to the group’s latest report, the world economy is set to experience a slump in growth in the coming year with 2020 growth estimated at 2.8 per cent.
The bank in its report which was released on Wednesday said that the growth of emerging markets and developing economies is expected to remain flat in 2019.
The pickup in economies that rely heavily on commodity exports is likely to be much slower than hoped for.
The report singles out factors of slowed growth as trade disputes between China and the US, increasing debt among the developing economies and increasing cost of debt servicing due the recent interest rate increase of a dollar
Higher debt levels have seen some economies particularly poorer countries more vulnerable to rising global interest rates, shifts in investor sentiments and exchange rate fluctuations, the report noted.
This may have an unprecedented economic effect on the majority of the African countries as the demand in China which is the biggest buyer for the commodities coming from these countries is slowing down amid the trade dispute.
The bank also warns that the changing weather conditions leading to a spike in food prices could also deepen poverty with those who are at the bottom of the economic spectrum.
Statistics from the bank show that the 2010-2011 food price hikes pushed more than 8.3 Million people back to poverty, calling for more collaboration in terms integrated policy formulation and implementation, setting up central bank buffers to encounter shocks, especially in the less developed world.
The World Bank produces the GEP reports twice a year in January and June, as part of its analysis of key global macroeconomics developments and their impact member countries.