The World Bank on 15 January 2013 projected that the world economy would expand 2.4 percent in 2013, little higher than the 2.3 percent achieved in 2012. In June 2012, the Bank forecasted the growth up to 3 percent, but due to the slow growth rate, high unemployment rate and less confidence in businesses across the developing nations it managed to revise the forecast earlier made.
The World Bank has reduced the projected growth rate of different countries. It has slashed the growth rate of Japan to its half from the one projected earlier and in case of US the growth rate has been slashed by 0.5 percent points. The bank also projected narrowing in the growth rate of the Euro Region. For emerging markets of Mexico, Brazil and India also the projection was lowered.
The report from the lead author of the Bank’s Global Economic Prospects Andrew Burns describes that the predicted recoveries of the bank in 2012 would be carried forward towards the end of the first quarter and second quarter of 2013.
The bank report also has claimed that the ongoing political battle in United States for raising the borrowing limit and spending cuts by the Government would bring loss of confidence in the rate of dollar creating an alarming situation for the world financial market and effect the growth rate. It also pointed out the diplomatic tensions between China and Japan would also have an impact on the growth rate.