World Bank cuts global growth to 2.6% in 2019

(Kitco News) – The World Bank is stepping up growing fears of recession after the international institution lowered its global growth outlook.

In a report released on Tuesday, World Bank economists said the global economy was expanding 2.6 percent this year, up from 2.9 percent previously. Economists' estimates are down since the middle of last year.

For 2019, the World Bank said growth should reach 2.7%.

"The global economy has slowed down at its lowest rate in three years. He is on the right track to stabilize, but his momentum is fragile and subject to substantial risks, "the economists said in his report. "A number of risks could disrupt this delicate dynamic: a new escalation of trade disputes between the world's largest economies, renewed financial turmoil in emerging and developing economies, or a slower pace of economic growth than currently envisaged. . "

The World Bank has said that the slowdown in trade, which is experiencing its slowest pace of growth since the financial crisis, is of particular concern.

# 121MiningInvestment: Global growth is expected to be 2.6% in 2019, down from 3% in 2018 due to weak international trade, slowing investment and trade tensions – John Baffes, senior economist of the World Bank Group | @Investor @KitcoNewsNOW #invest #mining @World Bank pic.twitter.com/qqs4mZaIzg

– NEWS Kitco (@KitcoNewsNOW) June 5, 2019

Economists have also said that rising public debt is another area of ​​growing concern and could hinder future growth.

"Excessive debt carries serious risks. Even in a context of low interest rates, debt can accumulate to unsustainable levels. A government that spends a lot on debt servicing spends fewer resources on other important activities, "said analysts. "High indebtedness also raises the possibility, in the minds of investors and consumers, that governments may eventually raise taxes to reduce deficits and deter business and consumer spending."

"There is an urgent need for countries to implement important structural reforms that improve the business climate and attract investment," said David Malpass, President of the World Bank Group, in a statement. adds to growth and investment.

Growing economic concerns have increased the attractiveness of gold for safe havens as prices are currently trading at a record high of three months. The last August medal in August was $ 1,342.40 an ounce and had increased 4.5% in the last five sessions.

In April, in its semiannual commodities report, the World Bank said it was optimistic about the price of gold, waiting for the yellow metal to rise by 3, 2% compared to 2018 prices.

"Prices have been supported by strong demand and a decline in real long-term interest rates," analysts said in the report. "The upside risks of the forecasts include the possibility of a reduction in interest rates in the United States."

Expectations for reducing US rates have grown exponentially in recent weeks. Markets see more than 50% chance of a rate cut as early as the month of July. The markets foresee the possibility of three rate cuts by the end of the year.