Growth should improve once commodities stabilise: World Bank

DAVOS: Global growth should improve once commodity prices stabilize, World Bank Chief Economist Kaushik Basu said on Thursday, adding that India was the top “bright spot” among emerging markets.

“As things stand, the main turbulence we are seeing is that caused by a fall in commodity prices,” Basu said in the Reuters Global Markets Forum.

“However, once commodity prices, primarily oil, stabilize, the benefits outweigh the costs, so we do expect a small pick up in growth this year.”

Earlier this month, the bank cut its cut its global economic growth forecast for 2016 to 2.9 percent from its June forecast of 3.3 percent. Yet this is still above the 2.4 percent growth rate estimated for 2015. Among emerging economies, India stood out, Basu added.

“India is the bright spot right now, with two important forces powering it,” he said.

“The low oil price is helping India very much, and a few initial reforms, with optimism that more are to come, is helping the economy grow.”

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