World economy to grow 2.7% in 2010,in slowed-down recovery: WB
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Global economy is expected to grow 2.7 percent this year and 3.2 percent in 2011 after shrinking 2.2 percent in 2009, but the recovery may slow down, according to the Global Economic Prospects 2010, a report released by the World Bank on Wednesday.
The World Bank said that the global economic recovery "that is now underway will slow later this year as the impact of fiscal stimulus wanes." Financial markets remain troubled and private sector demand lags amid high unemployment.
"Overall, these are challenging times," said Justin Lin, World Bank Chief Economist and Senior Vice President, Development Economics.
"The depth of the recession means that even though growth has returned, countries and individuals will continue to feel the pain of the crisis for years to come," he said.
The report warns that while the worst of the financial crisis may be over, the global recovery is fragile. It predicts that the fallout from the crisis will change the landscape for finance and growth over the next 10 years.
Gross domestic product (GDP) -- the wide measure of overall economy -- for developing countries are for a relatively robust recovery, growing 5.2 percent this year and 5.8 percent in 2011 -- up from 1.2 percent in 2009.
The World Bank sees China's economy grow in 2010 and 2011 both by 9 percent.
Prospects in rich countries, which declined by 3.3 percent in 2009, is expected to increase much less quickly -- by 1.8 and 2.3 percent in 2010 and 2011.
The United States, the world's biggest economy and the epicenter of the financial crisis that triggered the downturn, would see 2.5 percent growth in 2010 and 2.7 percent in 2011. The World Bank projected the U.S. economy to shrink 2.5 in 2009.
World trade volumes, which fell by a staggering 14.4 percent in 2009, are projected to expand by 4.3 and 6.2 percent this year and in 2011, said the World Bank.
While this is the most likely scenario, considerable uncertainty continues to cloud the outlook. Depending on consumer and business confidence in the next few quarters and the timing of fiscal and monetary stimulus withdrawal, growth in 2011 could be as low as 2.5 percent and as high as 3.4 percent.
"Unfortunately, we cannot expect an overnight recovery from this deep and painful crisis, because it will take many years for economies and jobs to be rebuilt. The toll on the poor will be very real," said Lin, the World Bank's chief economist.
"The poorest countries, those that rely on grants or subsidized lending, may require an additional 35-50 billion in funding just to sustain pre-crisis social programs," he said.
