World Bank urges financial inclusion as growth falters in Europe and Central Asia
Asli Demirguc-Kunt: I think the global macro outlook is looking down. So if you have been following the World Bank products, the global economic prospects that we issue had the title: Darkening Skies. I think that encapsulates what’s going on. The slowing activity in major economies, the trade tensions, the potentially disorderly developments in a number of countries, political uncertainty — these things have basically been bringing the growth forecast down generally.
For our ECA countries, the escalation of trade tensions and policy uncertainties, for example Brexit, the potential for widespread shifts in investor sentiment particularly for countries where there is significant foreign exchange debt issues, potential for the reversal of structural reforms — all these are making our forecasts more gloomy than they would have been otherwise.
The external situation is affecting the region. Certainly within the region the fact that the euro area is slowing down is affecting many of the countries. And the Turkish situation has had an influence over the region given the close trade links. And overall the investor sentiment also does have a certain impact. Aggregate growth in the developing countries of the region is 3.1% in 2018 and it’s projected to slow to 2.1%. That’s the outlook, but we are hoping that growth is going to pick up in 2020/2021.