World Bank cuts Nigeria, others’ growth rate

The World Bank yesterday lowered its 2012 growth forecast for Nigeria and other developing countries from 6.2 per cent to 5.4 per cent.

Nigeria had recorded a Gross Domestic Growth (GDP) of 10.3 per cent, 10.6 per cent, 5.4 per cent, 6.2 per cent, seven per cent, six per cent, seven per cent, 7.4 per cent  and 7.2 per cent in 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010 and 2011

The World Bank also lowered its growth projection for high-income countries and Euro Area from 2.7 per cent to 1.4 per cent  and 1.8 per cent to -0.3 per cent, citing the Euro Area debt problems and weakening growth in several big emerging economies, which dim global growth prospects.

The World Bank in the newly-released Global Economic Prospects (GEP) 2012, said global growth is now projected at 2.5 and 3.1. “Using purchasing power parity weights, global growth would be 3.4 and four per cent for 2012 and 2013,” the report said. 

The bank also urged Nigeria and other developing countries to prepare for further downside risks caused by the Euro Area debt problems and weakening growth in several big emerging economies.

It, however, noted that growth in Sub-Saharan Africa remained robust in 2011 at 4.9 per cent. “Excluding South Africa, which accounts for over a third of the region’s GDP, growth in the rest of the region was even stronger at 5.9 per cent in 2011, making it one of the fastest growing developing regions. Increased investment flows, rising consumer spending, and the coming on stream of new mineral exports in a number of countries should accelerate Sub-Saharan Africa’s growth to 5.3 per cent in 2012 and 5.6 per cent in 2013. Nonetheless, merchandise exports, tourism receipts, commodity prices, foreign direct investment and remittances are all susceptible to a Euro Area recession,” the report stated. 

While prospects in most low-and middle-income countries remain favorable, the report noted that the ripple effects of the crisis in high-income countries are being felt worldwide. “Already, developing country sovereign spreads have increased 45 basis points on average and gross capital flows to developing countries plunged to $170 billion in the second half of last year, compared with $309 billion received during the same period in 2010,” the report noted.

The World Bank’s Chief Economist and Senior Vice -President for Development Economics, Justin Yifu Lin, said developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time.

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World Bank cuts Nigeria, others’ growth rate