World Bank has improved on its outlook for global outlook for the first time in three years, as it forecasts in its annual report for stronger growth in 2014. It understands that there would be a support for stronger growth in developing economies. The bank sees a global expansion of 3.4 percent in 2015, compared with 3.3 percent predicted in June.
But the vulnerability still remains as the U.S stimulus would be slowly cutting down. Risk being that these changes can trigger the pushing of global interest rates higher, leading to affect the flow of money in and out of developing countries and adding to volatility of the international financial markets.
“The performance of advanced economies is gaining momentum, and this should support stronger growth in developing countries in the months ahead. Still, to accelerate poverty reduction, developing nations will need to adopt structural reforms that promote job creation, strengthen financial systems, and shore up social safety nets''
World Bank forecasts that global GDP will grow by 3.2% this year, up from 2.4% with major growth coming from developed economy..
Developing nations will grow by 5.3% this year, up from 4.8% in 2018.
It is understood that for the first time in five years, there are indications that a self- sustaining recovery has begun among high-income countries, but this may also be joined by developing countries as a second engine for growth.
Prior 2008, emerging markets had grown at a pace of 7.5%, but it has been at its slowest pace since the global financial crisis hit in 2008.
Global growth at that level would mark the strongest expansion since the 2010.
What can be expected is that, whilst the advance economies strengthen, they may begin pulling back from massive monetary stimulus started to keep the house in order. U.S. Federal Reserve has been slowly winding its stimulus program, though it might keep its interests low for at least another year.