World Bank forecasts grim 2009, plunging trade

World Bank forecasts grim 2009, plunging trade

Washington: 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 on Tuesday, the multilateral institution forecast the global economy would expand a mere 0.9% next year and world trade volume would fall 2.1%.

“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% while wealthier, developed economies are expected to contract 0.1%, the multilateral development lender said.

The latest report was far more pessimistic than the bank’s prior 2009 forecasts of global growth of 3.0% and 6.4% 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% and developing economies by 5.1% in early November.

The World Bank projected that world trade volume would contract 2.1% in 2009, the first decline since 1982.