In its Global Development Finance 2009 report, the World Bank downgraded its expectations as to world economic performance, with a prediction of a larger contraction this year (2.9 percent rather than just 1.7 percent). The shrinkage will be strongest in the developed nations, where overall GDP in expected to contract 4.5 percent in 2009 (with the pain felt in the U.S., Japan and the Eurozone), but the developing world too will suffer, and more than a superficial glance at the stats suggests. While the slowdown from 6 percent a year to 1.2 percent a year growth looks bad enough, the number is actually negative when China and India are taken out of the picture (a 1.6 percent contraction). Overall, the level of global trade is due to shrink by almost 10 percent this year.
As to next year, the Bank remains relatively optimistic, if a bit more subdued, its estimate of global growth for 2010 falling from 2.3 to 2 percent a year as "the world enters what appears to be an era of markedly slower economic growth" (emphasis added). (Slower than what, exactly? Growth has been lousy for decades, a fact the World Bank's own data reflects. Just check out the numbers in this piece here.)
Right now I'm wondering if this isn't going to be the last time the WB downgrades this particular projection.