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WASHINGTON — The World Bank downgraded its forecast for the global economy this year, citing a bitter American winter and the political crisis in Ukraine.

In an outlook released Tuesday, the bank still expects the world economy to grow faster — 2.8 per cent this year versus 2.4 per cent in 2013. But its new estimate is weaker than the 3.2 per cent expansion it had predicted in January.

The US economy — by far the world’s largest — shrank at an annual rate of 1 per cent from January to March, chilled by an unusually nasty winter. The political crisis in Ukraine dragged growth in Eastern Europe and Central Asia. Together, those factors will “delay the recovery we talked about in January but not derail it”, World Bank economist Andrew Burns told reporters.

Helped by super-low interest rates, the world’s wealthiest countries will expand 1.9 per cent this year, up from 1.3 per cent in 2013. In developing countries, growth is expected to stay flat at 4.8 per cent.

In its twice-yearly Global Economics Prospects report, the World Bank estimates that the 18 European countries that use the euro currency will grow 1.1 per cent collectively this year after shrinking in 2012 and 2013. It sees the US economy recovering from the weak first quarter and growing 2.1 per cent this year, up from 1.9 per cent in 2013.

World growth is accelerating as the US and Europe regain strength. Overall, the global economy is expected to expand 3.4 per cent next year and 3.5 per cent in 2016.

The rate of economic growth has stalled in China and other developing countries that had bounced back quickly from the financial crisis of 2008-2009. China’s economy is expected to decelerate steadily, from 7.7 per cent growth last year to 7.6 per cent this year to 7.5 per cent in 2015 and 7.4 per cent in 2016.

In China, the slowdown is partly deliberate. Authorities are attempting to manage a transition from rapid growth based on exports and investment in real estate, factories and infrastructure to slower but more stable growth based on spending by Chinese consumers. But the Chinese slowdown has pinched other developing countries — from South Africa to Brazil — that provide the world’s second biggest economy with raw materials.

The good news: The US and Europe should pick up some of the slack as their economies improve and they demand more imports from developing countries. After growing less than 3 per cent each of the past two years, world trade will expand 4.1 per cent this year and 5.2 per cent in 2015, the bank predicts.

Central banks, including the US Federal Reserve, have been supporting economic growth by keeping interest rates low. Last week, the European Central Bank (ECB) announced additional rate cuts and took the historic step of imposing a negative interest rate — charging banks for deposits with the ECB in an effort to prod them to make more loans instead of hoarding money. Burns said the ECB’s moves to protect Europe’s fragile recovery were “appropriate” and “go in the right direction”.

But he and other economists worry about what will happen when the central banks declare their mission accomplished and let interest rates rise again. Higher rates in the US and Europe likely will lure investment away from developing countries. If the shift occurs too quickly, it could damage developing countries’ economies and cause chaos in their financial markets — a potential rerun of the Asian financial crisis of 1997-1998. 

Other risks to the World Bank’s growth forecast include continued tension in Ukraine, political instability in Syria and Thailand, and the possibility that China’s economy slows faster than expected.

PARIS –– Emerging giants China, Russia and Brazil are losing some of the driving steam which helped prevent a global economic slump, but advanced economies are now increasingly able to pick up the slack, according to key data published on Tuesday.

The Organisation for Economic Cooperation and Development (OECD) said its latest monthly report on leading economic indicators suggest that “the growth momentum is weakening in most major emerging economies” with the indicators showing weaker than usual growth in China, Russia and Brazil.

Conversely, the United States and Canada are showing stable growth momentum, the 18-member eurozone as a whole including Italy is improving and non-euro Britain is steadying at unusually strong growth rates, the OECD said.

The OECD’s report was published shortly after Britain and Italy both published strong industrial output for the month of April.

The British statistics office reported that industrial output expanded 0.4 per cent in April from the March level when it gained 0.1 per cent and over 12 months showed a jump of 3 per cent.

That was far ahead of analysts’ expectation of a 12-month rise of 2.8 per cent.

At Berenberg bank, chief UK economist Rob Wood commented: “Today brought yet more good news on the strength of the UK recovery, with manufacturing output rising solidly for the fifth consecutive month.

“The UK economy is increasingly firing on all cylinders, setting up the second quarter for another strong growth reading.”

Italy’s industrial production also rose more than expected in April in a welcome boost for the eurozone’s third-biggest economy.

Industrial production was up 0.7 per cent compared with output in March — the first increase for three months.

The Italian data “suggest that the economy might return to growth in Q2”, said Capital Economics analyst James Howat.

However, the analyst was less upbeat about Tuesday’s French data, which showed industrial output rallied in April by 0.3 per cent, saying it suggested “that the recovery there remains pretty weak”.

The OECD said however, that for Germany and France, the signs were that these two economies were growing steadily.

The signals for Japan pointed to an upset in its momentum towards growth, but this could reflect one-off factors, the OECD said.

The OECD said that its leading indicators of trends suggested “that the growth momentum is weakening in most major emerging economies”.

But India looks as though it is picking up speed, the OECD said.

Russia shrinks, Poland, Turkey grow 

These indicators, which are closely watched by analysts and investors as reliable pointers to future activity, “point to growth below trend in Brazil, China and Russia”.

Russia is on the brink of recession, with the government forecasting up to $100 billion in capital outflows, as investors jittery about the crisis in Ukraine pull out their funds.

But for India the indicators “tentatively indicates a positive turning point” which could suggest “a return to faster growth”, said the OECD.

In Poland, the biggest economy in former Communist central Europe, the government approved a budget for next year on Tuesday, forecasting growth of 3.8 per cent.

Poland, a member of the European Union but considered by economists to be part of emerging Europe, has escaped recession, growing continuously since 1992. 

Separate data from emerging and non-EU Turkey showed that the Turkish economy grew at an annual rate of 4.3 per cent in the first quarter of 2014 despite political turmoil and a sharp rise in interest rates.

The OECD is a policy research centre and advice forum for 34 advanced democracies, and also monitors big emerging markets and notably those in the so-called BRICS group comprising Brazil, Russia, India, China and South Africa.

KUWAIT CITY –– The Kuwaiti government has decided in principle to end subsidies on diesel fuel but will deal with any negative impacts on consumers before implementing the decision, the Cabinet said.

Last month, the OPEC member’s government warned that spending outpaced revenues and this could lead to a budget deficit in 2017/2018 after years of surpluses.

“The council of ministers has decided in principle to stop subsidies on diesel,” a statement said late Monday.

But the Cabinet is waiting for a study by the higher planning council on ways to deal with possible negative effects on consumers.

Oil Minister Ali Al Omair told parliament three weeks ago that ending subsidies on diesel would save around $1 billion (735 million euros) a year out of total subsidies of around $18 billion.

Diesel is currently sold at around $0.20 a litre.

The step is one of several recommendations by a government committee formed last October to review subsidies on all services and commodities after costs have skyrocketed.

Finance Minister Anas Al Saleh told parliament the average annual growth in public spending was 20.4 per cent during the past decade against a 16.2 per cent for revenues.

The ministry has urged major cuts in subsidies, saying it was impossible for the state to sustain growth in wages and continue them.

Between 2005 and 2013 subsidies rose more than fourfold, from $4.1 billion to $18 billion, an annual growth rate of 23 per cent, the ministry said.

Oil income rose from $45.9 billion in 2005 to $106 billion last year.

The minister has said that, if oil prices remain at around $100 a barrel, Kuwait will post an estimated budget deficit of 2.3 billion in the 2017/2018 fiscal year.

Last month, the International Monetary Fund warned Kuwait to contain a rapid rise in public wages and subsidies to safeguard the economy against oil price shocks.

The Gulf state is also revising subsidies on electricity, water and petrol, currently sold at well below cost.

Kuwait has boasted a budget surplus in each of the past 14 fiscal years, helping to increase its sovereign wealth fund to over $500 billion, local media said.

AMMAN — Profit generated by Jordan Petroleum Refinery Company (JPRC) increased by 30.5 per cent, reaching JD28.2 million at the end of 2013 compared with JD21.6 million at the end of 2012. According to a disclosure to the Amman Stock Exchange,  gross profit amounted toJD32.1 million in 2013 compared with JD25.8 million in 2012. More than half of the company’s profit came from gas refining and filling at JD15.9 million, its oils factory at JD8.6 million, and its marketing and selling of petrol products at JD4.5 million. Last year, the JPRC completed the procedures needed to bring up its capital to JD50 million from JD40 million. 

AMMAN — A trade delegation from South Korea will visit Jordan next week to explore business opportunities with their Jordanian counterparts, according to a statement from Korea Business Centre in Amman. The delegation comprises representatives of 8 companies specialised in manufacturing and exporting pharmaceuticals, and medical materials and equipment. The Korean businessmen will hold business meetings with Jordanian companies on Sunday, according to the statement. This visit will focus on promoting and developing trade cooperation between the two countries, the statement said, highlighting the importance of the Jordanian market in terms of  reputation of the pharmaceutical industry, besides the country’s security and stability, qualified human resources and its location  as a gateway to the region. 

CAIRO — Egypt and the United Arab Emirates (UAE) have contracted a state-run company headed by a retired Egyptian army officer to build wheat silos that are a key part of the UAE's $4.9 billion aid package to Cairo.

The UAE is taking a hands-on role in supporting Egypt and is funding a range of development projects including the wheat silo-building effort that could help the world's biggest importer of the commodity lower its huge food import bill.

Reuters reported in March that the UAE was working directly with the Egyptian army to ensure the silo-building was conducted efficiently.

The UAE pledged last October to build a total of 25 wheat silos with a storage capacity of 1.5 million tonnes to help prevent the loss of billions of dollars worth of wheat per year.

The project targets addressing problems in the strategic wheat sector. Millions of poor Egyptians rely on government subsidised bread, but the wasteful and corrupt system for providing it strains government finances. Egypt wants to boost its storage capacity to reduce reliance on imports.

Though the UAE and Egyptian government ministers appeared together at a news conference in Cairo to announce the details of the construction of the first two silos, their choice of a Egyptian army-affiliated company to do the construction work confirmed the military's connection to the project.

UAE Minister of State Sultan Ahmed Al Jaber, who handles the aid projects, announced the signing of the cooperation agreement with Cairo alongside Egypt's Supplies Minister Khaled Hanafi and Planning Minister Ashraf El Araby.

WASHINGTON — Cybercrime has grown into a global industry worth around half a trillion dollars, with no sign of slowing, a research report pointed out Monday.

The report by the Centre for Strategic and International Studies (CSIS) with security firm McAfee estimated the global economic cost of cyber-attacks at $445 billion, accountting for the loss of 350,000 jobs in the United States and Europe.

"Cybercrime is a growth industry. The returns are great and the risks are low," the report said.

The study gave a range of $375 billion to $575 billion in losses, but the authors said even these figures were conservative in the face of limited data from many parts of the world.

"The costs of Cybercrime is going to continue to go up, barring a miracle," said Stewart Baker, a former Homeland Security official and co-author of the study.

James Lewis, a CSIS fellow and co-author, said the estimates are more conservative than some previous research pegging the cost at $1 trillion, but acknowledged difficulty in collecting data.

"Maybe half of the companies that get hacked don't tell the local police," Lewis said at a forum unveiling the study. "Many governments don't produce any data at all."

The authors said they believe their economic models produce a good estimate of economic losses but that some things are difficult to measure.

Many of the losses stem from theft of secret business information, or other forms of intellectual property.

Lewis indicated that in some cases, "someone might steal a billion dollars worth of intellectual property but is only able to monetise 10 per cent of that".

Yet the report called Cybercrime "a tax on innovation" because it reduces the return for new inventions or software, and may discourage some from investing or putting information online or in the cloud.

The researchers said cost of Cybercrime also includes the impact of hundreds of millions of people having their personal information stolen — some 40 million people in the US last year, 54 million in Turkey, 20 million in South Korea, 16 million in Germany and more than 20 million in China, according to the report.

"One estimate puts the total [number of victims] at more than 800 million individual records in 2013," the report said.

"This alone could cost as much as $160 billion per year. Criminals still have difficulty turning stolen data into financial gain, but the constant stream of news contributes to a growing sense that cybercrime is out of control," it concluded.

RIYADH — Standard and Poor's (S&P) held its sovereign credit rating for Saudi Arabia, the world's top crude exporter, at AA-/A-1+ with a positive outlook. "In our view, Saudi Arabia's government and external balance sheets remain strong and provide an ample buffer to withstand external shocks, including a drop in oil prices," S&P said in a statement. "We are therefore affirming our 'AA-/A-1+' sovereign credit ratings on the Kingdom of Saudi Arabia," the agency said. "The positive outlook indicates that we could upgrade Saudi Arabia in the next year if we believe that the government has built on its achievements in private-sector development." It forecast per capita income of $26,000 in 2014. Saudi Arabia, on the back of high oil prices, has announced a balanced budget for this year of a record $228 billion, up from $218.8 billion in 2013. Separately, state media reported that Saudi Arabia is preparing to launch its first sovereign wealth fund to manage budget surpluses from a rise in crude prices estimated at hundreds of billions of dollars. The central bank has managed investment of the kingdom's foreign currency reserves until now, much of it in US Treasury bonds. The consultative shura council is due to discuss a draft law for the National Reserve Fund this week, state news agency SPA reported. 

ABU DHABI — $3.3 billion of investments from the United Arab Emirates (UAE) flowed into the Kingdom, according to Jordan’s Ambassador to the UAE Nayef Zidan. He said on Sunday that $1.8 billion were injected by UAE investors during the first four months of this year, noting that $1.5 billion was invested last year. 

AMMAN — Jordan Investment Commission is going to prepare a national strategy on investments for (2015 – 2017),  Khaled Abu Rabei, the commission’s  acting chief said during a field visit on Saturday. Meeting with investors and representatives of industrial investment entities at El Hassan Industrial Estate, including representatives from Jordan Industrial Estates Corporation, he said the strategy will cover all investment-related aspects, including a promotion strategy.  The commission representatives will make several visits and hold meetings with investors in the various governorates to help overcome any obstacles hampering investors’ business across the country, he added.  At the meeting, investors highlighted several issues related to their businesses at El Hassan Industrial Estate and discussions focused on ways to deal with them.