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% 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.
"We know that, in developing countries, every 1.0% 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% 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.