WASHINGTON, United States–The World Bank says the Caribbean and other developing countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs, as they adapt to a new era of low prices for oil and other key commodities.
On Wednesday, the Washington-based financial institution in the latest Global Economic Prospects (GEP) report said this results in a "fourth consecutive year of disappointing economic growth."
The report said growth in Latin America and the Caribbean "will ease to 0.4 per cent in 2015, as South America struggles with domestic economic challenges, including widespread droughts, weak investor confidence and low commodity prices."
It adds that developing countries on a whole are now projected to grow by 4.4 per cent this year, with a likely rise to 5.2 per cent in 2016, and 5.4 per cent in 2017.
"Developing countries were an engine of global growth following the financial crisis, but now they face a more difficult economic environment," said World Bank Group President Jim Yong Kim.
"We'll do all we can to help low- and middle-income countries become more resilient so that they can manage this transition as securely as possible," he added. "We believe that countries that invest in people's education and health, improve the business environment, and create jobs through upgrades in infrastructure will emerge much stronger in the years ahead.
With an expected liftoff in US interest rates, the report says borrowing will become more expensive for emerging and developing economies over the coming months.
It says this process is expected to unfold relatively smoothly since the US economic recovery is continuing and interest rates remain low in other major global economies. (CMC)
