Xinhua, London :
The process of Britain applying for and negotiating an exit from the European Union (EU) will depress growth in the euro zone, the lead economist of the World Bank said on Wednesday.
Franziska Ohnsorge, lead economist of the World Bank, told Xinhua in London at a press conference for the launch of the bank’s report Global Economic Prospects (GEP) that the Brexit process was one of the uncertainties facing the global economy for 2017.
“We expect euro area growth to be broadly flat. We do expect the whole process of Brexit, all the uncertainties and discussions around it, we do expect them to weigh on sentiment,” said Ohnsorge, who was the lead author of the GEP report.
“It is one of the reasons why we do not expect a big pickup (in euro area growth) but with growth about 1.5 percent, it is still above potential, it is solid growth in the euro area.”
Ohnsorge said the World Bank had been surprised about the resilience of Britain’s economy in the wake of the Brexit vote, when many economists and business people had forecast economic difficulties.
“We have not expected financial markets to hold up so well, for confidence to hold up so well, and for activity to hold up so well. Part of that was, in our view the proactive response of the Bank of England and coordinated across central banks which has kept financial markets very calm,” said Ohnsorge.
The process of Britain applying for and negotiating an exit from the European Union (EU) will depress growth in the euro zone, the lead economist of the World Bank said on Wednesday.
Franziska Ohnsorge, lead economist of the World Bank, told Xinhua in London at a press conference for the launch of the bank’s report Global Economic Prospects (GEP) that the Brexit process was one of the uncertainties facing the global economy for 2017.
“We expect euro area growth to be broadly flat. We do expect the whole process of Brexit, all the uncertainties and discussions around it, we do expect them to weigh on sentiment,” said Ohnsorge, who was the lead author of the GEP report.
“It is one of the reasons why we do not expect a big pickup (in euro area growth) but with growth about 1.5 percent, it is still above potential, it is solid growth in the euro area.”
Ohnsorge said the World Bank had been surprised about the resilience of Britain’s economy in the wake of the Brexit vote, when many economists and business people had forecast economic difficulties.
“We have not expected financial markets to hold up so well, for confidence to hold up so well, and for activity to hold up so well. Part of that was, in our view the proactive response of the Bank of England and coordinated across central banks which has kept financial markets very calm,” said Ohnsorge.
