June 11 - A World Bank forecast splashes cold water on the global economic recovery - with Ukraine, U.S. weather and emerging markets behind a cut in its growth outlook, according to its lead author. David Pollard reports.
It's a long haul back to economic recovery. Ukraine and bad US weather just some of the hurdles along the way. The World Bank's latest report - Global Economic Prospects its full title - says US growth in particular has disappointed. Its lead author is Andrew Burns. SOUNDBITE (English), ANDREW BURNS, GLOBAL ECONOMIC PROSPECTS LEAD AUTHOR, WORLD BANK, SAYING: ''If you look at the US, it's been quite some time now that we've been expecting growth to break that three per cent frontier. It hasn't happened so far, certainly not in sustained fashion. So there is a risk that we will be disappointed going forward.'' World growth estimates are shaven by 0.4 per cent in the report. US GDP downgraded by a quarter of its previous estimate. Looking ahead, the World Bank says the recovery will pick up. Including the US - where the consumer accounts for 70% of the world economy, according to Barclays' Will Hobbs. SOUNDBITE (English), WILL HOBBS, VP RESEARCH, ECONOMICS & STRATEGY, BARCLAYS, SAYING: ''If you look at the US consumer, well, they're getting back to work and increasingly getting back to work, and increasingly feeling more confident. The net asset worth of the US consumer continues to grow, so we see the prospects for global economic growth as pretty good.'' But there is one big unknown. The euro zone is on target, says the World Bank, but what sort of impact could the Ukraine crisis have? SOUNDBITE (English), ANDREW BURNS, WORLD BANK, SAYING: ''If that were to deteriorate, we could see growth at the global level weaken by as much as 0.7, even 1.4 percentage points.'' The other top concern on the World Bank list: possible volatility in emerging markets. With the US central bank taking its foot off the QE gas pedal, they could be in for a rough ride. SOUNDBITE (English), WILL HOBBS, VP RESEARCH, ECONOMICS & STRATEGY, BARCLAYS, SAYING: ''We found, you know, half way through last year, when the Fed started talking a bit more aggressively or immediately about the prospect of monetary normalisation, you had the so-called 'taper tantrum' and that shook loose a lot of capital in emerging markets. And you could see the same happen again.'' If it doesn't, the global outlook looks good - the World Bank pencilling in 3.4 per cent growth next year, 3.5 per cent the year after.