Tag Archives: World Bank

Russian economy seen growing from 2017 onwards: World Bank

A man walks in front of the Novokuibyshevsk refinery near the city of Samara, October 28, 2010. REUTERS/Nikolay Korchekov/File Photo

MOSCOW (Reuters) – Russia’s oil-dependent economy is expected to grow from 2017 onwards, supported by higher global crude prices and oil production rising to new post-Soviet highs, the World Bank said on Tuesday.

The international lender said it expected Russian gross domestic product to grow by 1.3 percent in 2017 and by 1.4 percent in 2018 and 2019, following two years of economic contraction.

Greater oil earnings would “positively influence consumer and investor sentiment, leading to a recovery of domestic demand and modest economic growth in 2017-19,” the World Bank said in a semi-annual report.

It said its latest growth forecasts were based on the assumption that crude prices would average $55 a barrel this year, $60 in 2018 and $61.5 in 2019, and that an OPEC/non-OPEC agreement to restrict output was extended.

It cited International Energy Agency data as forecasting that Russia’s oil output would rise to 11.38 million barrels per day (bpd) this year and 11.54 million bpd next year, due to rising production by small- and medium-size energy companies.

The World Bank said rising consumption and a recovery in investment activity would drive Russia’s economic growth, citing the 2018 soccer World Cup that Russia is set to host as giving a potential boost to public investment.

Inflation is forecast to stabilize near the central bank’s target of 4 percent, but Russia’s longer-term growth prospects are constrained by low productivity, it added.

In November the World Bank forecast the Russian economy would grow 1.5 percent this year.

(Reporting by Andrey Ostroukh; Editing by Alexander Winning)

World Bank ready to help Venezuela if asked: Latam chief

Venezuelan flags are seen during an opposition rally in Caracas, Venezuela, April 8, 2017. REUTERS/Christian Veron - RTX34Q8A

By David Lawder

WASHINGTON (Reuters) – The World Bank Group stands ready to assist Venezuela, a member and shareholder of the institution, if the government asks for help in dealing with a punishing economic crisis, the bank’s top executive for Latin America said.

Jorge Familiar, World Bank vice president for Latin America and the Caribbean, told Reuters in an interview on Monday that the bank has had no engagement with Venezuela since it paid off past loans in 2008 under the late former President Hugo Chavez.

But Familiar said the bank’s officials have been intensely watching growing shortages of food and medicine this year as the oil exporting country sinks deeper into recession, sparking violent protests.

Familiar said that the multilateral lender would be ready to develop an engagement program for Venezuela, but it would need to be “invited” to do so by President Nicolas Maduro’s government.

“As with all shareholders of the institution, if the situation were to arise, we would be ready to engage with Venezuela,” Familiar said. “What we would need is for them to call us.”

On Tuesday, Familiar said that there would be many steps required before a World Bank loan to Venezuela could be discussed, including re-establishing a dialogue with government officials and providing technical assistance and analysis.

“We are far off from lending to Venezuela,” he said. “We could have a conversation that would start on the analytical front.”

Last year, the World Bank approved $2.5 billion in new credit lines for Peru to backstop the country’s financial plans amid falling revenues as commodity prices slumped.

The credit lines carry reform requirements under World Bank programs to support improvements in public expenditure management, public education and to streamline the formation of new private companies.

Familiar said Peru was meeting benchmarks for that program.

Venezuela was the outlier on Tuesday when the World Bank released its latest economic forecasts for Latin America and the Caribbean, predicting that regional growth would turn positive, to 1.5 percent in 2017 as recessions end in Brazil and Argentina, after a regional decline of about 1 percent in 2016.

The World Bank forecast that Venezuela’s growth would fall by 3.1 percent in 2017 after a spectacular 12 percent drop in 2016. It forecast that Venezuela would start to recover by 2018, with 0.6 percent growth amid firmer oil prices, but lag far behind regional growth of about 2.5 percent for 2018.

(Reporting by David Lawder; Editing by Dan Grebler)

Drug resistance in people and animals may push millions into poverty

The mcr-1 plasmid-borne colistin resistance gene has been found primarily in Escherichia coli, pictured.

By Alex Whiting

ROME (Thomson Reuters Foundation) – If drug-resistant infections in people and animals are allowed to spread unchecked, some 28 million people will fall into poverty by 2050, and a century of progress in health will be reversed, the World Bank said on Monday.

By 2050, annual global GDP would fall by at least 1.1 percent, although the loss could be as much as 3.8 percent – the equivalent of the 2008 financial crisis – the Bank said in a report released ahead of a high-level meeting on the issue at the United Nations in New York this week.

The rise of “superbugs” resistant to drugs has been caused partly by the increased use and misuse of antibiotics and other antimicrobial drugs in the treatment of people and in farming.

“We cannot afford to lose the gains in the last century brought about by the antibiotic era,” Tim Evans, the World Bank’s senior director for health, nutrition and population, told the Thomson Reuters Foundation.

“By any measure, the cost of inaction on antimicrobial resistance is too great, it needs to be addressed urgently and resolutely,” he said.

Greater quantities of antibiotics are used in farming than for treating people, and much of this is for promoting animal growth rather than treating sick animals, economist Jim O’Neill said in a report in May commissioned by the British government.

The O’Neill report estimated that drug-resistant infections could kill more than 10 million people a year by 2050, up from half a million today, and the costs of treatment would soar.

LIVESTOCK

Farmers too will be greatly affected. The bank estimates that by 2050, global livestock production could fall by between 2.6 percent and 7.5 percent a year, if the problem of drug resistant superbugs is not curbed.

“Investments are urgently needed to establish basic veterinary public health capacities in developing countries,” Evans said.

Improved disease surveillance, diagnostic laboratories to ensure a disease is identified quickly, inspections of farms and slaughterhouses, training of vets, and oversight over the use of antibiotics are also needed, he said.

The U.N. Food and Agriculture Organization (FAO) estimates 60,000 tonnes of antimicrobials are used in livestock each year, a number set to rise with growing demand for animal products.

One of the most important ways to curb the spread of drug resistant microbes in food is to promote good farming practices, said Juan Lubroth, chief veterinary officer of FAO.

“I think this is where we can do most of our prevention – better knowledge on hygiene, vaccination campaigns, so these animals do not get sick and need antimicrobials (drugs),” Lubroth said in an interview from Rome.

Public demand for food that is uncontaminated, and better training of health professionals – doctors and vets – are also vital to help contain the problem, he added.

Hospitals and pharmaceutical companies also need to do more to treat their waste, he said.

The World Bank estimates that an investment of some $9 billion a year is needed in veterinary and human health to tackle the issue.

“The expected return on this investment is estimated to be between $2 trillion and $5.4 trillion … or at least 10 to 20 times the cost, which should help generate political will necessary to make these investments,” Evans said.

(Reporting by Alex Whiting, Editing by Ros Russell.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, corruption and climate change. Visit http://news.trust.org)

China to relocate 2 million people this year in struggle to banish poverty

A homeless woman is seen on a cold winter night near Beijing South Railway Station in Beijing

BEIJING (Reuters) – China, fighting to stamp out poverty, will this year move more than two million of its poorest citizens from remote, inland regions to more developed areas, an official of the cabinet, or State Council, said on Tuesday.

The mass relocation of people is a strategy targeted at lifting 10 million citizens out of poverty by 2020, state news agency Xinhua has said.

Some of the villagers will move to areas with better social services, such as schools and hospitals, while others in remote areas will move to places with better roads and water supply, the official, Liu Yongfu, told a briefing.

The numbers would be stepped up gradually and may eventually hit 3 million, added Liu, who heads the cabinet’s Leading Group Office of Poverty Alleviation and Development.

“We will talk it over with the localities and accumulate some experience, after that we will increase step-by-step,” he said.

Despite two decades of rapid economic growth, poverty remains a huge issue in China, mainly in rural areas, where a lack of jobs drives out adults, leaving behind children and the elderly, often with limited access to schools and healthcare.

China’s poor, who make up about 5 percent of a population of nearly 1.4 billion, live mostly in the countryside, and earn less than 2,300 yuan ($362) a year, government and state media say.

In March Premier Li Keqiang promised a boost of 43 percent in funding for poverty relief programs. Last October, the cabinet said China aimed to lift all its 70 million poor above the poverty line by 2020.

In December, Li urged local authorities to provide housing, healthcare, schooling and employment for relocated citizens.

Since kicking off market reforms in 1978, China has lifted more than 800 million people out of poverty, but it remains a developing country and the reforms are incomplete, the World Bank says.

(Reporting by Megha Rajagopalan; Editing by Clarence Fernandez)

World Bank says Russia crisis to send poverty to highest in decade

Russian Money in Register

By Alexander Winning

MOSCOW (Reuters) – Russian poverty rates will return to 2007 levels this year as the economy continues to contract and inflation reduces people’s purchasing power, the World Bank said on Wednesday.

The international lender’s comments add to the view that it is ordinary Russians who have borne the brunt of the country’s economic crisis, as the blow for many firms has been cushioned by the weaker rouble and state aid.

The number of poor people in Russia will rise to more than 20 million out of a population of over 140 million, the World Bank said, the largest increase in poverty since the 1998-99 crisis that included a sovereign debt default.

Birgit Hansl, lead Russia economist for the World Bank, said the government would find it difficult to combat rising poverty because of a sharp fall in budget revenues stemming from the oil price collapse. Global prices for oil, Russia’s main export, have fallen to under $40 per barrel from over $115 in June 2014, while the economy has also been hit by Western sanctions imposed over Moscow’s role in the Ukraine crisis.

“It’s clear the fiscal space is very small to continue with social expenditure increases,” Hansl told a news conference.

Among ways to help ease poverty, she said social expenditure could be better targeted, including by means testing.

Mikhail Matytsin, a World Bank poverty economist, said the crisis had also driven a dramatic shift in consumption patterns.

The World Bank sees private consumption falling by 3 percent in 2016 in Russia after a decline of over 9 percent in 2015, a far sharper slump than during the 2008-09 global financial crisis.

“This is a new adjustment to the (economic) shock,” Matytsin said, saying households had cut back most on durable goods such as cars and domestic appliances.

The World Bank now sees private consumption recovering only very modestly and stabilizing at growth levels of around 2 percent from 2018. Before the latest economic downturn, private consumption in Russia had been rising at around 6 percent each year, Hansl said.

In its latest Russia economic report, the World Bank downgraded its growth forecasts to a contraction in gross domestic product of 1.9 percent this year and tepid growth of 1.1 percent in 2017.

It previously saw a contraction of 0.7 percent in 2016 and growth of 1.3 percent in 2017. It said its weaker forecasts reflected its new assumption that the oil price would average $37 a barrel in 2016, rather than the $49 forecast previously.

The World Bank said serious structural reforms, which it has long said are needed to ensure sustainable economic growth in Russia, were not likely before the 2018 presidential election.

(Editing by Jason Bush and Catherine Evans)

IMF Head Says U.S. Default Would Send World Into Recession

The head of the International Monetary Fund says that a default by the United States on Thursday could send the world into a major recession.

Christine Lagarde said that the default would cause “massive disruption the world over” during an interview for ABC’s Meet The Press.

“If there is that degree of disruption, that lack of certainty, that lack of trust in the US signature, it would mean massive disruption the world over and we would be at risk of tipping yet again into recession,” Lagarde said.

Jim Yong Kim, president of the World Bank, also expressed concern over the situation saying that the U.S. is “days away from a very dangerous moment.”

Multiple finance ministers for European nations told the BBC they don’t expect the U.S. to default but are very uneasy and would like to see the crisis to end soon.

BRICS Nations Could Challenge World Bank

The leaders of the BRICS nations are discussing the creation of a development bank that would be in direct competition to the World Bank.

The heads of Brazil, Russia, India, China and South Africa have long complained about a western bias in the decisions made by the World Bank. The fund would develop infrastructure projects in developing nations. Continue reading →