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Prospects for developing countries vary widely, reflecting local economic and policy conditions

Box 4
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Regional outlook

Overall, developing-country GDP is expected to firm somewhat in 2013, growing by 5.1 percent and gradually rising to 5.6 percent in 2014 and 5.7 percent in 2015 (Box 4 provides a regional breakdown of prospects, while the regional annexes provide additional detail). That aggregate story, however, hides considerable regional and country-level variation (figure 13). At least four classes of developing countries can be identified:

  • countries (including many in East Asia and Sub-Saharan Africa) that are growing rapidly and already close to or above potential, and therefore at risk of overheating;
  • countries that appear to be running up against capacity constraints at growth rates well below the growth rates of the pre-crisis period, including several large and economically important middle-income countries;
  • countries with considerable slack in their economies, whether because of the severity of the post-crisis downturn (developing Europe), or because of social and political disruptions to economic activity (Middle East & North Africa); and finally
  • developing countries where recovery from the crisis appears complete, and there are no outward signs of overheating—this is the largest group of the four.

Figure 13
Acceleration will be muted in regions already operating at close to full capacity
Figure 13
Source: World Bank

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