The World Bank has released a report, Global Economic Prospects 2012, which lowers previous forecasts on global economic growth and presents a grim picture of what lies ahead. The World Bank now projects global growth at 2.5 percent, with virtual stall speed for advanced economies. The report makes clear that the repercussions of the Eurozone debt crisis are now worldwide.
Developing economies are still projected to have a higher growth rate than developed economies, but at a slower rate, due to overall global contraction resulting from the sovereign debt crisis in Europe. In a warning to developing economies, Justin Yifu Lin, the World Bank’s chief economist said, “developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time.” It should be added that all countries need to be prepared for future shocks, as the Eurozone debt crisis, now rampaging for two years, seems likely to get a lot worse during the course of 2012.