The World Bank Wednesday slashed its 2012 growth forecasts for
both emerging and developing economies from its estimates of only six months
ago, and warned the world is on the cusp of a new global recession that could
be as bad as the crisis four years ago.
It warned that an escalation
in Europe's sovereign debt
crisis, a new oil shock,
or a "hard landing"
in one of the larger developing economies could trigger a global economic
downturn. The bank added that the risks of those events makes even the bank's
lowered growth forecasts "very uncertain."
A meltdown in financial
markets triggered by the sovereign debt problems in Europe poses the greatest
immediate risk, according to the report.
"An escalation of the crisis would
spare no one," said Andrew Burns, manager of global macroeconomics and
lead author of the report. "Developed and developing country growth rates
could fall by as much or more than in 2008 and 2009." Read more at CNNMoney
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