Growing pains, bubbly worries of world economy

TWO recent reports offered sombre, certainly sober reading: World Bank’s June 2014 update – “Global Economic Prospects – Shifting priorities, building for the future” and the Bank for International Settlements’ (BIS) 84th Annual Report, 2013-2014 released at end-June (BIS in Basel acts as the central banks’ banker).

They convey two important messages. First, as the global economy got off to a bumpy start this year, World Bank now has to trim its global growth forecast amid a weaker outlook all round. Second, BIS is concerned that today’s buoyant financial markets are out-of-sync with the wobbly economic and worsening geopolitical outlook. This disconnect is worrisome.