The World Bank today said the global economy will shrink three per cent in 2009, much worse than expected earlier, with most of the developed nations projected to witness contraction.
"The global economy will decline this year by close to 3 per cent, a significant revision from a previous estimate of 1.75 per cent.
"Most developing country economies will contract this year and face increasingly bleak prospects unless the slump in their exports, remittances, and foreign direct investment is reversed by the end of 2010," the World Bank said in a statement.
The World Bank Group President Robert B Zoellick said the world economy is set to contract this year by more than previously estimated, and "poor countries will continue to be hit hard by multiple waves of economic stress."
Even with the stabilisation of financial markets in many developed economies, unemployment and under-utilisation of capacity continue to rise, putting downward pressure on the global economy, the multilateral lending agency noted.
"Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks," Zoellick said..
The overall financing gap for developing countries would be between USD 350 billion to USD 635 billion in 2009