 Jan-18, The World Bank 

A structural slowdown in China is offsetting a modest cyclical pickup in the rest of East Asia. Geopolitical tension, increased protectionism, and an abrupt tightening of global financial conditions pose downside risks, as China's GDP growth forecast slows to 6.3 percent in 2018.

The near-term EMDE outlook is solid

Image: The World Bank

Growth in Latin America is projected to advance to 2 percent in 2018, with momentum expected to gather as private consumption and investment strengthen, particularly among commodity-exporting economies.

In the Middle East & North Africa, growth is expected to jump to 3 percent in 2018. Reforms are expected to gain momentum, fiscal constraints are expected to ease, and improved tourism is anticipated in non oil-dependent countries.

Capital inflows to EMDEs

Image: The World Bank

Consumption in South Asia is expected to stay strong as exports recover, and investment revives as a result of policy reforms and infrastructure upgrades. Setbacks to reforms or an upswing in global financial volatility could slow growth. But India is expected to pick up to a 7.3 percent GDP increase in fiscal 2018/19.

Sub-Saharan Africa is anticipated to pick up to 3.2 percent GDP growth in 2018, with stronger growth depending on firming commodity prices and reforms. A drop in prices, global interest rate increases, and inadequate debt amelioration could set back economic growth.

EMDE potential growth under reform scenarios

Image: The World Bank

Growth in Eastern Europe & Central Asia is forecast to ease in 2018. Moderating economic activities in the Euro Area will contribute to a slowdown, counterbalanced by a gradual recovery in Central Asia commodity exports. Russian growth is expected to remain at 1.7 percent, while Turkey is projected to slow to 3.5 percent.

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