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WB predicts slower growth in developing nations in 2009

The World Bank said Tuesday that economic growth in the de veloping countries was expected to slow “sharply” in 2009 as the global economy deteriorates.

In its Global Economic Prospects update, which was made available to PANA in New York, the bank stated: “Gross Domestic Product (GDP) in the developing world wi l l grow by just 2.1 per cent this year, sharply down from the 5.8 per cent growth rate in 2008”.

It said that “the projected pace of growth, which is also sharply slower than th e 4.4 per cent growth the bank forecast for the developing world in November 200 8 , reflects the rapid deterioration of global financial and economic conditions” .

The bank also said that it expected global growth to contract by 1.7 per cent th is year, the first decline since World War II.

It disclosed that “in 2010, growth momentum will turn weakly positive as financi al-sector consolidation, lost wealth and knock-on effects from the financial cri s is continue to dampen economic activity”.

“However, the pace and timing of recovery is still highly uncertain,” according to the bank.

It also stressed that “even though growth should rebound — albeit slowly — eco nomic activity will remain depressed, with unemployment and significant sectoral adjustment persisting for the next two years”.

“Even if global growth turns positive again in 2010, output levels will remain d epressed, fiscal pressures will mount, and unemployment levels will rise further

in virtually every country well into 2011,” Hans Timmer, manager of the Global T rends Team in the World Bank’s Development Prospects Group, noted.

The bank forecast that the GDP in Europe and Central Asia will fall by 2 per cen t in 2009, compared with a 4.2 per cent growth in 2008.

In Latin America and the Caribbean, it said that the GDP would contract this yea r, “although outturns may be diverse at the country level”.

“Overall, GDP is projected to decline 0.6 per cent following gains of 4.3 per ce nt last year,” it said.

GDP growth in East Asia and the Pacific is expected to ease to 5.3 per cent in 2 009, as growth in China slumps to 6.5 per cent and several smaller economies in t he region, including Thailand, fall into recession.

The bank said that prospects for South Asia had been marked down to 3.7 per cent growth for 2009 from earlier forecast of 5.4 per cent and down from 5.6 per cen t growth in 2008.

It also said that “growth in the Middle East and North Africa appears least affe cted among developing regions, dropping just 0.3 points from earlier projections

to 3.3 per cent”.

It cited reduced oil revenues and cuts in oil output as factors that will restra in GDP growth among oil exporters to 2.9 per cent from 4.5 per cent in 2008.

In Sub-Saharan Africa, GDP growth in 2009 is expected to halve from 4.9 per cent in 2008 to 2.4 per cent, dropping 1.8 points below earlier projections.

“The dramatic shift in commodity prices will have strong effects across countrie s,” the world bank concluded.

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