World Bank cuts forecasts for global economy, Japan this year

The World Bank cut Tuesday its growth forecast for the global economy this year, citing a slowdown in emerging economies as a result of the U.S. downturn following unusually cold weather and the Ukrainian crisis, while also lowering its forecast for Japan.

The World Bank said in the semiannual Global Economic Prospects report that global gross domestic product will grow 2.8 percent in real terms, down from 3.2 percent in its earlier estimate released in January.

"The global economy got off to a bumpy start this year buffeted by poor weather in the United States, financial market turbulence and the conflict in the Ukraine," the report said.

The World Bank expects the global economy to expand 3.4 percent in 2015, unchanged from the earlier estimate.

The Washington-based organization revised downward its growth projection for Japan this year to 1.3 percent from 1.4 percent.

"Japan is the only major developed economy expected to slow down this year," the World Bank said, noting the country grew 1.5 percent in 2013.

The lackluster projection for Japan is attributable to a drag from the consumption tax hike in April and fading effects from accommodative monetary easing, the World Bank said.

Over the medium-term, the pace of growth in the Japanese economy will "depend on how successful structural reforms are in increasing productivity growth and investment and in mobilizing labor supply," the report said, forecasting the country's 2015 growth at 1.3 percent.

For the United States, the World Bank slashed its growth projection this year to 2.1 percent from the earlier estimated 2.8 percent but was optimistic about a rebound later this year.

Although the U.S. economy contracted in the January-March quarter for the first time in three years with abnormally cold weather curtailing investment and exports, incoming data suggest that "the economy is rebounding strongly," the report said.

The World Bank revised up its 2015 growth projection for the United States to 3 percent.

For developing countries, the World Bank sharply cut its growth projection for this year to 4.8 percent from the earlier estimated 5.3 percent. Their economies will expand 5.4 percent in 2015, it said, slightly down from the earlier projected 5.5 percent.

The growth projection for China this year was trimmed to 7.6 percent from 7.7 percent and that for India to 5.5 percent from 6.2 percent.