Latest News:  
Beijing   Light snow    0 / -4   City Forecast

People's Daily Online>>World

World Bank warning of another global recession

(Shanghai Daily)

08:59, January 19, 2012

THE World Bank is warning developing countries to prepare for the "real" risk that an escalation in the eurozone debt crisis could tip the world into a slump on a par with the global downturn in 2008/09.

In a report sharply cutting its world economic growth expectations, the World Bank said Europe was probably already in recession. If the debt crisis deepened, global economic forecasts would be significantly lower.

"The sovereign debt crisis in the eurozone appears to be contained," Justin Lin, chief economist for the World Bank, said in Beijing yesterday. "However, the risk of a global freezing-up of the markets as well as a global crisis similar to what happened in September 2008 is real."

The World Bank predicted world economic growth of 2.5 percent in 2012 and 3.1 percent in 2013, well below the 3.6 percent growth for each year projected in June.

"We think it is now important to think through not only slower growth but sharp deteriorations, as a prudent measure," said Hans Timmer, the bank's director of development prospects.

The report said if the eurozone debt crisis escalates, global growth would be about 4 percentage points lower. It forecast that high-income economies would expand just 1.4 percent in 2012 as the eurozone shrinks 0.3 percent, sharp revisions from growth forecasts last June of 2.7 percent and 1.8 percent respectively.

It cut its forecast for growth in developing economies to 5.4 percent for 2012 from its previous forecast of 6.2 percent.

It saw a slight pick up in growth in developing economies in 2013 to 6 percent. But the report said threats to growth were rising.

It cited failure so far to resolve high debts and deficits in Japan and the United States and slow growth in other high-income countries.

On top of that, political tensions in the Middle East and North Africa could disrupt oil supplies and add another blow to global prospects.

China's growth - forecast in the report at 8.4 percent - could help bolster imports and gives it "big fiscal space" to respond to changing conditions, Lin said.

But the World Bank report added: "No country and no region will escape the consequences of a serious downturn."


Leave your comment0 comments

  1. Name


Selections for you

  1. Chinese premier starts official visit to Qatar

  2. Dough modelling artist makes preparation for Year of the Dragon

  3. White whales present show to celebrate Chinese New Year

  4. Polar bear cub meets visitors in China's Shandong

Most Popular


  1. Farewell to double-digit GDP growth
  2. Actions speak louder than words
  3. New driving force for East Asian cooperation
  4. In love with luxury amid global gloom
  5. China should take fight to US over Iran
  6. How will HK go through economic difficulties in 2012
  7. US dollar is just a dirty shirt
  8. Factors affecting world economy in 2012
  9. Why Russia's aircraft carrier visits Syrian port
  10. Central grain reserves turn into 'market stabilizer'

What's happening in China

Smoggy days spur surge in air filter sales

  1. China's FDI falls 12.73 pct in Dec.
  2. Flashy earphones an invitation to thieves
  3. China seeks to improve college hardware
  4. Oil prices rise on China economic report
  5. China set to develop 10 major metals

PD Online Data

  1. Yangge in Shaanxi
  2. Gaoqiao in Northern China
  3. The drum dance in Ansai
  4. Shehuo in Baoji City
  5. The dragon dance