World Bank warns of deeper global contraction - by Lisa Twaronie
The World Bank predicted today Monday June 22 that the global economy will shrink 2.9% this year, a deeper fall than the 1.7% contraction it predicted in March. It also warned that international capital to developing nations will continue to slow, with flows projected to fall to $363 billion in 2009 from their peak of $1.2 trillion in 2007. Developing countries will grow by 1.2% in 2009, the bank said, down from 5.9% in 2008 and 8.1% in 2007. Excluding China and India, gross domestic product in developing countries is expected to contract 1.6%. The world has entered an era of slower growth that will require tighter and more effective oversight of the financial system, the bank said in a statement.
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