The global economy is in for one more year of “disappointing” growth, according to a World Bank study published Wednesday.
Growth is expected to improve a bit next year. Experts at the global lender now predict that the global economy will expand 2.8 percent this year as commerce confronts the sometimes surprising impacts of falling oil prices and rising U.S. interest rates.
Washington cut its key interest rate nearly to zero during the recession to revive flagging growth. But the recovering economy no longer needs this crutch, and the U.S. central bank is expected to slowly raise interest rates later this year. That would increase the cost of borrowing and tend to slow growth.
As expected, falling oil prices have hurt the economies of some oil-exporting nations. But Wednesday’s study shows that falling crude prices have not yet helped oil-importing nations as much as economists thought they would.
Overall, economies in the developing world are predicted to expand 4.4 percent this year and speed up a little in 2016.
China’s growth is expected to slow to 7.1 percent, while Russia’s economy, hurt by falling oil prices and sanctions, is expected to have a negative growth rate of 2.7 percent.
For the United States, the strengthening dollar means that American-made goods are more expensive and less competitive on global markets, which could slow the growth of the world’s largest economy. That would cut demand for the goods and services that flow to this key market from all over the world.
Growth will hit 1.5 percent in the eurozone as the declining value of its currency bolstered exports, falling oil prices encouraged consumer spending, and officials cut interest rates to record-low levels. Greece’s problems repaying loans have hurt its economy, but the World Bank says so far, it has had a “limited” impact on its neighbors.