Development banks see emerging economy slowdown
By Chris Sleight31 March 2009
The World Bank has halved its economic growth forecast for the developing world in 2009 to just +2.1%. The Asian Development Bank (ADB) meanwhile says developing Asia will grow by +3.4% in 2009.
Deteriorating financial and economic conditions has prompted the World Bank to revise its forecast for developing world growth down from the previous projection of +4.4% in 2009.
It also says that the with GDP expected to fall by -3% in the Organisation for Economic Co-operation and Development (OECD) countries - the world's 30 richest economies - and -2% in other high income economies, world GDP will fall -1.7% this year. This would be the first fall in world output since World War II.
The bank sees a weak recovery getting underway in 2010, but expects unemployment to continue rising until 2011.
In a similar forecast to the World Bank's, the ADB's Asian Development Outlook 2009 report says economic growth in developing Asia will bounce back to +6% in 2010, following this year's meagre +3.4% rise in GDPO. The ADB says economic growth in the region was +6.3% last year and +9.5% in 2007.
ADB acting chief economist Jong-Wha Lee said, "The short term outlook for the region is bleak as the full impact of the severe recession in industrialised economies is transmitted to emerging markets."