Wednesday, 16 January 2013

World Bank cuts global growth forecast

The World Bank has lowered it growth forecast for the world economy. Bloomberg reports:

The World Bank cut its global growth forecast for this year as austerity measures, high unemployment and low business confidence weigh on economies in developed nations.

The Washington-based bank projects the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012. It halved its forecast for Japan, cut the U.S. projection by 0.5 percentage point and predicted a second year of contraction in the euro region. It also lowered projections for emerging markets led by Brazil, India and Mexico.

US economic data on Tuesday were mixed. Retail sales rose 0.5 percent in December, the biggest gain in three months. The producer price index fell 0.2 percent in December, the third consecutive decline. The Federal Reserve Bank of New York’s general economic index fell to minus 7.8 in January from minus 7.3 in December. Home prices grew by 7.4 percent in November from the previous year, according to CoreLogic, the fastest increase since May 2006.

Meanwhile, in the UK, house prices held steady in December as the RICS house price balance rose to 0 from -9 in November, avoiding a negative reading for the first time since June 2010. The inflation rate also held at 2.7 percent for the third month running in December.

In Germany, inflation accelerated to 2.0 percent in December from 1.9 percent in November even as the economy contracted an estimated 0.5 percent in the fourth quarter.

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