The World Bank has painted a grim picture of the global economy in 2009, with growth weakening to a crawl and trade volume falling for the first time in 26 years.
In its "Global Economic Prospects" report yesterday, the multilateral institution forecast the global economy would expand a mere 0.9 per cent next year and world trade volume would fall 2.1 per cent.
"The global economy is at a crossroads, transitioning from a sustained period of very strong developing country-led growth to one of substantial uncertainty as a financial crisis rooted in high-income countries has shaken financial markets worldwide," Justin Lin, the chief economist of the anti-poverty bank, said in the report.
Developing countries' economies would likely expand at an annual pace of 4.5 per cent while wealthier, developed economies are expected to contract 0.1 per cent, the multilateral development lender said.
"We know that, in developing countries, every 1.0 per cent reduction in the growth rate will mean around 20 million people lost the opportunity to get out of poverty," Lin said at a news conference at the bank's headquarters in Washington.
The latest report was far more pessimistic than the bank's prior 2009 forecasts of global growth of 3.0 per cent and 6.4 per cent for developing countries, issued in June.
They also were gloomier than those of its sister institution, the International Monetary Fund, which forecast the world economy would expand by 2.2 per cent and developing economies by 5.1 per cent in early November.
The World Bank projected that world trade volume would contract 2.1 per cent in 2009, the first decline since 1982.