World Bank reduces forecast for 2016 world economy

The World Bank is downgrading its forecast for the global economy this year — again.

The aid agency predicted Tuesday that the world economy will expand 2.4 percent this year, down from the 2.9 percent it expected in January and unchanged from a tepid 2015.

"The global economy is fragile," said World Bank economist Ayhan Kose, who helped produce the forecast. "Growth is weak."

In the years since the world began recovering from the 2008 financial crisis, the World Bank and the International Monetary Fund have repeatedly proved too optimistic about the world economy and have had to downgrade their previous forecasts.

The World Bank's latest 2016 forecast is more pessimistic than the IMF's outlook for 3.2 percent global growth this year, a projection made in April.

Since then, it's become clearer that low commodity prices continue to vex many developing countries whose economies depend on exports of those commodities. And advanced economies are still struggling to gain momentum as they contend with aging workforces and lackluster productivity growth.

The World Bank expects the U.S. economy to grow 1.9 percent this year, down from 2.4 percent in 2015. The downgrade for the United States reflects a weak first quarter: Growth from January through March reached a negligible 0.8 percent annual rate. U.S. manufacturers have been especially hurt by a strong dollar, which has made their goods more expensive overseas.

Read more on: USA News.

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