World Bank Cuts Growth Forecast for Developing Nations
Economic growth in developing nations will slow this year far more than previously estimated, the World Bank said in its Global Economic Prospects report.
In the report, the World Bank more than halved its forecast for growth in developing nations, from 4,4 percent to 2,1 percent.
The revision reflects the speed and ferocity with which the financial crisis has arrested economic activity since the World Bank issued its last forecast in November 2008.
– Across the developing world, we see that conditions of recession are affecting the poorest people, said World Bank Chief Economist Justin Yifu Lin, adding: – This could reverse years of progress and is nothing less than an emergency for development.
In its report, the Bank also noted that overall growth across the globe is expected to shrink by 1,7 percent this year. Even if global growth turns positive again next year, output will remain depressed, fiscal pressures will mount and unemployment levels will rise even further in nearly every nation well into 2011, the Bank said.
“Developing countries are being battered by successive waves” as the advanced industrial economies contract and banks ration credit, World Bank President Robert Zoellick said, adding: – Countries in central and eastern Europe may be the most at risk.
– In rich countries, people talk of bonuses or no bonuses. In parts of Africa, South Asia and Latin America, the struggle is for food or no food, Zoellick noted.
In related news, Robert Zoellick announced a 50 billion dollar global trade liquidity program on Tuesday and urged G20 leaders to support the effort to reverse a sharp drop in trade due to the global economic crisis.
– These public funds can be leveraged through a risk-sharing arrangement with major private sector partners, Zoellick said.
Working with the World Trade Organization (WTO), the World Bank could also tap resources and the experience of national export credit agencies, he stressed.
Kilde: www.worldbank.org
