World Bank warns of downturn worse than ’08

BEIJING — The World Bank warned Wednesday of a possible slump in global economic growth and urged developing countries to prepare for shocks that could be more severe than the 2008 crisis.

For the United States, the bank cut this year’s growth forecast to 2.2 percent from 2.9 percent and for 2013 to 2.4 percent from 2.7 percent.

As reasons, it cited the anticipated global slowdown and the on-going fight in Washington over spending and taxes.

The bank also cut its growth forecast for developing countries this year to 5.4 percent from 6.2 percent and for developed countries to 1.4 percent from 2.7 percent.

For the 17 countries that use the euro currency, it forecast a contraction, cutting their growth outlook to -0.3 percent from 1.8 percent.

Global growth could be hurt by a recession in Europe and a slowdown in India, Brazil and other developing countries, the Washington-based bank said.

It said conditions might worsen if more European countries are unable to raise money in financial markets.

“The global economy is entering into a new phase of uncertainty and danger,” said the bank’s chief economist, Justin Yifu Lin. “The risks of a global freezing up of capital markets as well as a global crisis similar to what happened in September 2008 are real.”

Click below to continue reading:

via World Bank warns of downturn worse than ’08 – Business – Stocks & economy – msnbc.com.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: