World Bank urges policy shift
By Wang Yanlin |
June 9, 2011, Thursday
|
Print Edition
Print Edition
DEVELOPING countries need to shift from fighting crises to policies that will sustain growth while developed countries should continue to focus on the crisis and work at overcoming it, the World Bank said yesterday in a report.
It predicted China's economy will grow at a slower pace of 9.3 percent this year from 10.3 percent in 2010 as stimulus spending comes to an end and policy tightening leads to a slowdown in property investments.
China, which performed well in coping with the crisis, should focus on meeting domestic challenges such as high inflation and moderating economic growth.
The bank's June 2011 edition of Global Economic Prospects report said China's price pressures may rise because of more costly oil and industrial commodity prices. But they may weaken in the coming 12 months as international food prices are forecast to moderate, offsetting the rise in non-food inflation.
Some economists had forecast China's consumer prices may increase to hit a three-year high of 5.5 percent in May.
Over the longer term, China and other countries in East Asia will face fundamental challenges related to sustaining the environment, energy security and climate changes.
"To sustain growth, policies will need to actively encourage the shift towards the usage of clean(er) energy by increasing energy efficiency, low-carbon technologies in power generation and building of low-carbon cities," the report said.
The bank also said that as developing countries put the financial crisis behind them, they "need to focus on tackling country-specific challenges such as achieving balanced growth through structural reforms, coping with inflationary pressures, and dealing with high commodity prices."
"In contrast, prospects for high-income countries and many in Europe remain clouded by crisis-related problems such as high unemployment, household and banking-sector budget consolidation, and concerns over fiscal sustainability among other factors," it said.
The Washington-based bank estimated economic expansion for developing countries to slow from 7.3 percent in 2010 to 6.3 percent annually from 2011 to 2013.
It predicted China's economy will grow at a slower pace of 9.3 percent this year from 10.3 percent in 2010 as stimulus spending comes to an end and policy tightening leads to a slowdown in property investments.
China, which performed well in coping with the crisis, should focus on meeting domestic challenges such as high inflation and moderating economic growth.
The bank's June 2011 edition of Global Economic Prospects report said China's price pressures may rise because of more costly oil and industrial commodity prices. But they may weaken in the coming 12 months as international food prices are forecast to moderate, offsetting the rise in non-food inflation.
Some economists had forecast China's consumer prices may increase to hit a three-year high of 5.5 percent in May.
Over the longer term, China and other countries in East Asia will face fundamental challenges related to sustaining the environment, energy security and climate changes.
"To sustain growth, policies will need to actively encourage the shift towards the usage of clean(er) energy by increasing energy efficiency, low-carbon technologies in power generation and building of low-carbon cities," the report said.
The bank also said that as developing countries put the financial crisis behind them, they "need to focus on tackling country-specific challenges such as achieving balanced growth through structural reforms, coping with inflationary pressures, and dealing with high commodity prices."
"In contrast, prospects for high-income countries and many in Europe remain clouded by crisis-related problems such as high unemployment, household and banking-sector budget consolidation, and concerns over fiscal sustainability among other factors," it said.
The Washington-based bank estimated economic expansion for developing countries to slow from 7.3 percent in 2010 to 6.3 percent annually from 2011 to 2013.
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