The World Bank last week lowered its outlook for global economic growth for 2015 amid a broad-based slowdown in emerging markets as they face tough transition with high borrowing costs and lower commodity prices. The lower forecast comes on the heels of a similar downgrade by the International Monetary Fund the previous week.

The World Bank said it now expects the world economy to grow by 2.8 per cent in 2015, 0.2 of a percentage point slower than its January forecast. The organisation also urged the Federal Reserve to hold off raising rates until next year, citing the risks it may pose to emerging markets. The growth forecasts for 2016 and 2017 were both left unchanged at 3.3 per cent and 3.2 per cent, respectively.

In the meantime, the eurozone’s seasonally adjusted GDP rose by 0.4 per cent during the first quarter of 2015, compared with the previous quarter, according to a second estimate published by Eurostat, the statistics office of the European Union.

In the fourth quarter of 2014, GDP also grew by 0.4 per cent. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.0 per cent.

In addition to a drop in the price of oil, a weaker euro due to the European Central Bank’s bond-buying programme has helped the currency bloc’s output. The region’s better economic performance comes despite mounting European Union frustration with the Greek government in its negotiations with creditors to avoid default.

Finally, in the United States, employment increased by much more than expected in the month of May, data released by the Labour Department showed last week. Non-farm payroll employment soared by 280,000 jobs compared to forecasts for an increase of about 225,000 jobs.

Meanwhile, the increase in payrolls for the month of April was revised down to 221,000 from 223,000 jobs. However, the growth for March was upwardly revised to 119,000 from 85,000 jobs.

The stronger than expected job growth show hiring managers are confident that the economy will regain its footing after faltering early this year. The report also boosts the chances of a Federal Reserve rate hike in September.

This report was compiled by Bank of Valletta plc for general information purposes only.