The World Bank last week revised its global growth forecast for this year and next. Its twice-yearly Global Economic Prospects report estimates that the world economy will grow by 3% in 2015, below its previous forecast of 3.4%.

It blamed the revision on “disappointing economic prospects in the euro-zone, Japan and some major emerging economies — such as Brazil and Russia”, offsetting the benefit of lower oil prices.

The report forecasts that the global economy will grow by 3.3% in 2016, as opposed to its previous forecast of 3.5%.

World Bank chief economist Kaushik Basu said: “The global economy is running on a single engine — the American one. This does not make for a rosy outlook for the world.” He also said that falling oil prices could bring down inflation across the world.

He said: “Fears of deflation, along with overall gloomier global prospects and stagnant US wages, could encourage the US Federal Reserve to raise interest rates more slowly than anticipated.”

UBS Bank analyst Daniel Morgan said: “Europe has been pretty sluggish, China has still got that property overhang, and Japan has entered recession.

“The USA and the UK are going fine, so the global growth picture is patchy but has definitely deteriorated from six months ago. However, we are definitely not in financial
crisis territory, where global trade is impaired and can’t be financed. We’re still seeing commodity transactions — just at lower prices.”