A significant decline in global economic growth has been predicted by the World Bank for 2009 in both developed and emerging countries.
A report released by the bank reveals that the world’s predicted economic growth in developed countries will drop from 2.5 per cent, which it achieved in 2008, to just 0.9 per cent this year.
For emerging countries, growth is predicted to drop from 7.9 per cent, which it achieved in 2007 to 4.5 per cent this year.
According to the World Bank, the possibility of a global recession cannot be ruled out.
Justin Lin, the World Bank’s chief economist, said: “The financial crisis has eased tensions in commodity markets, but is testing banking systems and threatening job losses around the world.”
The World Bank also said that capital flows to developing countries are reducing fast, lowering the level of investment, while the slowdown in world trade is likely to cut into their export markets.