World Economic Outlook by World Bank CFO
We′ve seen the global economic growth forecast get slashed，... China′s GDP projections downgraded.... All things economy... seem everything BUT sound these days.
Should we really be worried about what lies ahead？
I sat down with the Managing Director and Chief Financial Officer of the World Bank Group... to get an expert′s view. So， China and Asia′s GDP forecast have been reduced. Should we be worried about this？
We should always be worried when things are changing. And the truth is that it goes much beyond China today.
There are three adjustments happening at the same moment. All of them are welcome.
We knew China′s growth is not sustainable， we knew the quantitive easing policy supported by the federal reserve is not sustainable forever and we knew the commodities cycle is super charged.
So all of this had to come back to reality at some stage. The main issue is that everything is happening at the same stage.
What is scary is the conjunction of the three. We know that the end game is a positive end game. What we have to manage is the transition. This is where we need everyone to collaborate. What is the World Bank doing to achieve that？
I think that is why 2015 is a very important year because we have all these forces which play the special role.
People are nervous when things are slowing down， you tend to be more selfish and concentrate on issues.
At the same time， this year， we have three major conferences.
The first in Ethiopia this July where the international community decided to focus its efforts on pursuing the financing. We had in New York in September of endorsement… so it′s a goal for everybody.
And we will meet in Paris for climate change concerns. It is very interesting to see these special kind of worrying forces at the same time the strong efforts of international community to gather and find a momentum together. And we have to rely a lot on that. We have push on that. We have to trigger all efforts to stay united.
Let′s talk about the AIIB. Do you welcome the competition？
I think for me， it′s a welcome move. I mean it. We cannot argue on the one end that the world is needing one to one point five trillion dollars every year and complain that a new guy coming will provide ten， twenty billion dollars.
We still have a huge gap. So I welcome them on board. We want to have them off－ground next year. I think it is a partner and will be a partner.
We have to do things together. Yes， it is a healthy competition. Monopoly is not good. I call it a healthy competition.
Do you think the Fed′s Quantitative Easing program was effective？
The truth is that the U.S.， even if it is not as fast in the past in recovery， even if it takes more time， it is more tappy. Then in the past and the U.S. economy is back to something that is close to 5％ employment rate even if it is a prize of dropping the participation rate， the U.S. economy is above 2％ growth rate.
So the U.S. economy is kind of back on track.