World Bank concerned about global economy, outlook grim
The Sydney News.Net
BEIJING - The latest survey by the World Bank has portrayed a grim outlook for the global economy in the wake of risks posed by an escalation in the euro zone debt crisis and and a slowdown in India, Brazil and other developing countries.
Wednesday 18th January, 2012
The Global Economic Prospects report sharply cuts world economic growth expectations and predicted that Europe was probably already in recession.
If the euro area debt crisis deepened, global economic forecasts would be significantly lower and could tip the world into a slump on par with the global downturn in 2008-09, the report said.
The global economy would likely expand by just 2.5 per cent this year and by 3.1 per cent in 2013, down from last June's 3.6 per cent forecast for both years.
"The sovereign debt crisis in the euro zone appears to be contained," Justin Lin, the chief economist for the World Bank, told reporters in Beijing Wednesday.
"The global economy is entering into a new phase of uncertainty and danger. The risks of a global freezing up of capital markets as well as a global crisis similar to what happened in September 2008 are real."
The report warned that developing countries were more vulnerable than they were in 2008 because they could find themselves facing reduced capital flows and softer trade.
"No country and no region will escape the consequences of a serious downturn...Developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time," the World Bank has warned.
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