The recovery in low-income countries (LICs) stalled in 2019, with growth falling to a weaker-than-expected 5.4 percent as global and country-specific factors dampened activity. Globally, external demand was softer and commodity prices were weaker. Locally, political instability and devastation from extreme weather events weighed on economic activity in some countries. Growth in LICs is expected to hold steady at 5.4 percent in 2020 but rise after that. This will depend on improved stability, recovery from extreme weather events, continued investment in infrastructure, and the implementation of reforms to strengthen business environments. However, among LICs affected by fragility, conflict, and violence, growth will be noticeably weaker. Downside risks include slower-than-expected growth in major trading partners, rising debt vulnerabilities, growing insecurity, increased frequency of natural disasters, and health crises.

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