Global Economy Could Stall Again on Eurozone and Japan Worries: World Bank Chief Economist

Outlook for the global economy has become gloomier in recent months, and global economic growth could stall once again, according to the World Bank's chief economist Kaushik Basu.

In an interview with Xinhua, Basu said data over the past few months indicated that a takeoff for the global economy is unsure. Before six months, economists predicted that the global economy would witness a slow and clear recovery.

Given the current outlook, the world economy is facing the risk of stalling growth, he noted.

Eurozone and Japan are the main slowdown areas, according to Basu.

Speaking about Eurozone, Basu said growth in the region was close to zero, with only Germany reporting growth rates above zero. Meanwhile, the Japanese economy is in stagnation.

The US economy has apparently recovered from the crisis and is doing "reasonably" well, with growth rate above 2% and steady reduction in unemployment, Basu said.

However, the economy is still facing underlining weakness as the large size of the long-term unemployed in the country is threatening to erode its labour market skills.

Basu also mentioned that the growth slowdown in China would impact its trading partners such as Africa, Germany and India, as well as its outbound investment destinations.

The Chinese economy does face short term challenges, such as overinvestment and debt issues, but the long-term outlook is fine, according to the economist. The country will also lead global growth, as emerging countries are set to control the pace of growth in the world economy in the next 15 to 20 years.

Basu expects the Chinese economy to grow 7.4% in 2014, slightly lower than the previous forecast.

The International Monetary Fund (IMF) earlier lowered its global economic growth forecasts for 2014 and 2015, saying global economic recovery was weak and uneven.

The international agency also added that the world economy may never return to the pace of expansion seen before the financial crisis.

"The pace of global recovery has disappointed in recent years", the IMF said.

"With weaker-than-expected global growth for the first half of 2014 and increased downside risks, the projected pickup in growth may again fail to materialise or fall short of expectation."