1st LD: World Bank lowers global economic growth projection to 2.8 pct

The World Bank on Wednesday tamed down its estimate of the global economic growth from 3 percent to 2.8 percent for this year, with developing economies facing a string of challenges.

According to its latest Global Economic Prospects report, high- income countries are projected to grow by 2 percent this year, 0.2 percentage points lower than its last estimate in January. Developing countries are now projected to grow by 4.4 percent, 0.4 percentage points than the previous calculation.

"Developing countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs as they adapt to a new era of low prices for oil and other key commodities, resulting in a fourth consecutive year of disappointing economic growth this year," according to the report.

"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 in a statement.

With an expected liftoff in U.S. interest rates, borrowing will become more expensive for emerging and developing economies over the coming months, the report said, adding this process is expected to unfold relatively smoothly since the U.S. economic recovery is continuing and interest rates remain low in other major global economies. Endite