Well, the World Bank is simply confirming the obvious. It shouldn’t take a large financial institution to state the obvious regarding the predicament created by the global economic downturn. According to their forecast, 2009 is seeing record declines in output and trade and that millions are being pushed into poverty.
The global economy is expected to drop by 1.7% this year and will be the first time it will drop since World War II. Their latest projection is in stark contrast to the 0.9 growth projection. The sharp contraction marks a dramatic 2.6 point downward revision from the 0.9 percent growth in 2009 forecast only last November.
The World Bank report “reflects the rapid deterioration in financial and economic conditions — and the increasingly negative interaction between weakening economies and fragile financial systems — that have come to the fore since late 2008 for virtually every country in the world.”
The World Bank sees that the hardest hit will be the developing countries. Opportunities for trade are expected to shrink and lending by the First World would also see tough times as nations try to combat the downturn by channeling expenditure inward.
In the US, for example, unemployment is reaching record highs in several states and the real estate market crash saw many Americans losing their homes. Developing countries are expected to be hit harder.
