Dubai: The World Bank has slashed its forecast for growth in the world economy, citing that the developing countries are going to face a “series of tough challenges” this year with higher borrowing costs, and lower oil and commodity prices.

The World Bank Group’s latest Global Economic Prospects (GEP) report released on Wednesday stated that the developing countries are now expected to grow by 4.4 per cent in 2015, down from the 4.8 per cent forecast in December, but they are likely to expand by 5.2 per cent next year and 5.4 per cent in 2017. 

At the same time, the global economy is projected to grow by 2.8 per cent, lower than the 3 per cent forecast in January.

“Developing countries were an engine of global growth following the financial crisis, but now they face a more difficult economic environment,” said World Bank Group President Jim Yong Kim.

There are at least 30 developing countries in the East Asia, Pacific and South Asia, and these include Indonesia,  Bangladesh, India, Nepal, Philippines, Pakistan and Sri Lanka, which have huge diaspora populations in the UAE and other parts of the Middle East.

"We'll do all we can to help low- and middle-income countries become more resilient so that they can manage this transition as securely as possible. We believe that countries that invest in people's education and health, improve the business environment, and create jobs through upgrades in infrastructure will emerge much stronger in the years ahead. These kinds of investments will help hundreds of millions of people lift themselves out of poverty."

The World Bank said the emerging and developing countries will find it more expensive to borrow over the coming months with an expected liftoff in interest rates in the United States.

What is making the situation worse is the decline in the prices of oil and strategic commodities, which many developing countries heavily depend on.

“Lower prices for oil and other strategic commodities have intensified the slowdown in developing countries, many of which depend heavily on commodity exports,” the World Bank said.

"After four years of disappointing performance, growth in developing countries is still struggling to gain momentum," said Franziska Ohnsorge, lead author of the World Bank report.