Washington - SPA
The World Bank on Tuesday warned developing countries to strengthen their defenses against the European debt crisis, predicting years of volatility in a slowing global economy. In its semi-annual report on worldwide economic conditions, the World Bank forecast global “weak growth” of 2.5 percent this year, while the pace of growth in developing countries would slow to 5.3 percent, the weakest rate in the past 10 years. Rich countries are expected to see only 1.4 percent growth this year, limited by a 0.3 percent contraction in the 17-country euro-zone as the bloc deals with financial turmoil. “For all high-income countries, not just Europe, it will take many years to undo the damage that was done in the global financial crisis in 2008 or, more accurately, to address the problems that were created in the boom period before the crisis,” said World Bank chief of development prospects Hans Timmer. Developing countries have fewer means to survive shocks to their economies than they had in 2007, before the global financial crisis accelerated, the World Bank said. “Another serious financial crisis is a possibility,” Timmer told reporters. If high-income countries continue to grow slowly, “it is still possible for developing countries to [achieve] very solid growth rates,” Timmer said. “In case of a serious financial crisis, no developing country will be spared.” The United States, the world’s biggest economy should have slightly slower growth of 2.1 percent this year, while Japan, recovering from the 2011 earthquake and tsunami disaster, should expand 2.4 percent, a sharp half-point higher than believed six months ago. China was expected to slow to 8.2 percent from the 8.4 percent seen in January.