World Bank: Grim Prospects for 2012

The World Bank released its Global Economic Prospects (GEP) 2012 in Beijing on January 18, announcing that the global economic situation is not optimistic. Developing countries should prepare for further downside risks, as eurozone debt problems and weakening growth in several large emerging economies are dimming global growth prospects, the report said.

The bank has lowered its growth forecast for 2012 to 5.4 percent for developing countries and 1.4 percent for high-income countries (-0.3 percent for the eurozone), down from its June estimates of 6.2 and 2.7 percent (1.8 percent for the eurozone), respectively. Global growth is now projected at 2.5 and 3.1 percent for 2012 and 2013, respectively.

Slower growth is already visible in weakening global trade and commodity prices. Global exports of goods and services expanded an estimated 6.6 percent in 2011 (down from 12.4 percent in 2010), and are projected to rise by only 4.7 percent in 2012. Meanwhile, global prices of energy, metals and minerals, and agricultural products are down 10, 25 and 19 percent respectively since peaks in early 2011. Declining commodity prices have contributed to an easing of headline inflation in most developing countries. Although international food prices eased in recent months, down 14 percent from their peak in February 2011, food security for the poorest, including in the Horn of Africa, remains a central concern.

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via World Bank: Grim Prospects for 2012 — Beijing Review.

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