World Bank: Global recession has deepened
Filed under: Economy
The World Bank is slashing its forecast for global economic growth this year. International trade and private investment remain frozen, the organization said in a report, likely leading to a 2.9 percent contraction in the world economy in 2009.Expect the world economy to start growing again in the second half of this year, albeit at a pace that's "much more subdued than might normally be the case," the World Bank said.
World Bank economists' outlook is much gloomier than it was just a few months ago. In March, the organization predicted a 1.7 percent decline in global economic output this year and a 2.3 percent increase in 2010 as the world economy begins to improve.
The organization takes a particularly dim view of the state of investment in developing economies. Investment capital flowing into those countries totaled $1.2 billion in 2007, but will fall to just $363 billion this year, a drop that is "troubling for its macroeconomic consequences," the report found.
Meanwhile, international trade will likely see its sharpest decline since World War II, further hurting export-dependent developing economies.
Combined, those influences will limit growth in developing economies to 1.2 percent next year. The World Bank had previously expected two percent growth for those countries.
"Already under severe strain, low-income countries face increasingly grave economic prospects" if current trends in trade and investment don't reverse, the World Bank said.
The big-picture predictions for worldwide economic growth put the World Bank somewhat at odds with the International Monetary Fund, the other big finance organization backed by world governments. IMF economists last week slightly raised their expectations for U.S. economy growth, and on Friday one of the group's senior officials hinted that it might boost its outlook for global economic growth next year, as well.
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Reader Comments (Page 1 of 2)
6-22-2009 @ 9:49AM
Tim said...
WTF. The spineless U.S. congress just pass a $108billion dollar TAXPAYER bailout for European banks and millions for other countries. So this is how the World Bank makes a projection that the economy will turn around soon when they finish handing out the U.S. tax dollars!!!!!!! SICKING!!!!
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6-22-2009 @ 10:22AM
CAVUTO said...
MARKET IS GOING TO CRASH...EVERYBODY PULL YOUR MONEY OUT BEFORE IT'S TOO LATE..
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6-22-2009 @ 9:09PM
William said...
The sky is falling . . . the sky is falling . . . really, the sky is falling!
Please.
6-22-2009 @ 10:28AM
sgentilejr said...
Shame on the World Bank people for undermining the governments of the World who are trying their best to prop up their economies and stem the recession. Theor prediction may be accurate, but they are not helping by making such predictions, instead such a prediction will only make things worse and stall any chance of recovery.
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6-22-2009 @ 12:01PM
Redman said...
Yeah, right. Better to lie and tell people things are rosy when an idiot can see they are not.
6-22-2009 @ 11:00AM
DeeLa said...
Sell you bonds; cash in your credits and buy gold. Next year will be a crash. That's what world investors are doing under the blanket through carriers. I know people don't like to think doomsday, but you better get your thoughts together. Especially with all the bull$hit DC is feeding us. Read between the lines and tune them out; open your eyes.
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6-22-2009 @ 11:05AM
DeeLa said...
sgen, let me get this clear: Although you agree the world bank is accurate in their prediction, you believe that the world bank is not helping the situation by announcing their (accurate) predictions? So in other words, you believe people should be in the dark about the truth and instead listen to the bull$hit $pin of the truth (aka inaccuracy) spewed by President Cream Puff and his legacy of radical followers? That's going to make the bad man go away?? Oh, brother. You MUST be a liberal. God forbid you face the truth.
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6-22-2009 @ 11:15AM
Ron S. said...
Hate to think about doomsday. In S. Florida if you drive around and look, every strip center is full of black holes, every office building has as sign "space available". My friend is a VP at a commercial RE bank and says the portfolio of commercial loans in trouble is at 25% and climbing. Only solution so far for too much debt is take on more debt? We are just kicking the can down the road. Then Wall Street and DOW Industrials are moving up? Classic Bear Market Rally. I do not think we have seen the lows yet. I don't think anyone has the solution for what is happening now in the USA economy.
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6-22-2009 @ 1:49PM
steve said...
Same story on Orange County--So.Cal---malls, strip centers,office buildings--vacant everywhere !!!! Only going to get worse !!!!!!!!
6-22-2009 @ 11:16AM
Karl said...
6-22-2009 @ 10:56AM zac said...
All Hail Queen Nancy's 757 The Jet is a USAF Boeing 757
*And they STILL want to talk about Sarah's clothing??
Republicans! Are you out there?
*MADAME PELOSI*
Madame Pelosi wasn't happy with the small private jet that comes with the Speaker's job...no, Madame Pelosi was aggravated that this little jet had to stop to refuel, so she ordered a Big Fat 200 seat jet that could get her back to California without stopping!
==============================================
Zach, just how much did uncle Bush cost us for two wars? I told the American people that it was only going to cost us 85 billion; We are now at 3 trillion Dallors. So you bitch about small amount as this compared to Bush s expenses. Sounds like a Republican complaint.
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6-22-2009 @ 3:21PM
Bob said...
LOL!!! The Bushies claimed that Iraqi oil would pay for our "mission"....Instead, the taxpayers are left on the hook for trillions, not to mention that the pre-emptive strike was totally unwarranted.....
6-22-2009 @ 11:21AM
jeff said...
Wake up and realize the truth!! This is not ACORN or Socialism this is the further takeover of our country by the BIG BANKS! Check out the FEDERAL RESERVE on the internet and not the FED run sites which are a bunch of lies but try the others which tell you the FED is owned by the BIG BANKS and if you really look into it they caused the recession in the CARTER years to get REGAN in so he would let them have only 10% reserves instead of the 50% they had before!! Yes this made BANKS unstable. They have caused every recession in co-operation with the BANKS including this one so the BIG BANKS can buy up other banks, financial companies for 10% of their real worth and of course take peoples homes and businesses when they cannot pay their loans during the artificially created depressions! CHECK OUT this and other WEBSITES LIKE IT and learn the real truth http://www.save-a-patriot.org/files/view/whofed.html GET RID OF THE FED
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6-22-2009 @ 7:13PM
Kevin C. said...
You are one of the only other people who understands what is going on in this country. The Fed we were taught in school as most of our (fed-educated) schools is looked upon as a part of the gov. When all of our problems started was when we unhinged from the gold standard. Now they are running on borrowed time with the dollar -- keep an eye out for our new currency-- the Amero. Our founding fathers knew big banks ( Fed) were evil and corrupt and did everything they could to prevent them gaining power-- all fine for 250 years. So the story goes.....................
6-22-2009 @ 12:04PM
wayne said...
Once everything crash down, your dollars is worthless so no necessary to withdraw all money, you need to start collect all silver and gold because its value will skyrocket once everything crash down.
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6-22-2009 @ 12:05PM
Henry Hull said...
It's going to be a long time before things ever get going again...last time we had a major contraction was during the carter reagan period precipitated by the Vietnam war and the continuing cold war....We at last started coming out in 83 or 84 but this was because Reagan started to borrow heavily and he gave up some credit which after the crunch of volcker was now available again...but soon Reagan too started running into the obvious..so what saved us then? Gorbachev! With perestroika things eased up, expenses eased up etc...but lets understand something..Reagan was no global economist! Reagan gave no one anything..it was not trade that saved us, but our own expansion within our own nation as money meant for the cold war started heading into the local economy!!! My point being that commodities were still relatively cheap because the worlds economy was still contained...this is not going to be the case today....by expanding the worlds economy you have let the cat out of the bag so to speak!!! We will struggle for decades to contain expenses, and what was a one on Reagans scale of difficulty is going to be a ten on Obama's due to the development round the world!!!! I am stunned by how little the worlds economists really understand these issues!!! THEY EITHER DONT UNDERSTAND OR THEY ARE LYING I JUST CANT FIGURE OUT WHICH OF THESE TWO IT IS...OR A COMBINATION OF BOTH PERHAPS!!
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6-22-2009 @ 12:37PM
Sandy said...
This is not news. Keep printing money America and watch the economy contract, however when it finally recovers the printing of money will only make it hyper- inflate.
THE BOTTOM LINE: Leave the printing of money to counterfeiters. We need to make our money circulate the old fashion way with new and expanding business and nothing more. The motto:
Capitalism is dying to work if only we would let it.
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6-22-2009 @ 1:05PM
Donovan said...
Well its nice to read the truth for a change. And coming from the WORLD BANK, one is much more likely to believe what they have full knowledge of, as opposed to what our Government and some economists have been stating.
It seems our Government and economists, just cant make up their minds as to just what they want people to believe, or how they word what they state. So hopefully people/consumers/investors will in fact believe them.
I'm personally going with the World Banks statement, and prediction.
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6-22-2009 @ 7:42PM
Geordi said...
This is news? Of course the world economy isn't going to grow: people stopped buying things. The problem with the economy is it's all based on buying things and sooner or later, people discover they don't need to buy all those things to be happy.
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6-22-2009 @ 1:53PM
Dan said...
globalism=communism=one world government, is that America? You make the choice, the WTO or communism?
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6-22-2009 @ 1:54PM
Dan said...
I mean't the WTO or democracy?
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