Washington, DC, June 10, 2010—
Even as the world economic recovery continues to advance, it faces fresh headwinds on the road to sustainable medium term growth,
cautions the World Bank’s latest Global Economic Prospects 2010.
Global GDP is projected to expand between 2.9 and 3.3 percent in 2010 and 2011, strengthening to between 3.2 and 3.5 percent in 2012, reversing the 2.1 percent decline in 2009.
Developing economies are expected to grow between 5.7 and 6.2 percent each year from 2010-2012. High-income countries, however, are projected to grow between 2.1 and 2.3 percent in 2010
—not enough to undo the 3.3 percent contraction in 2009.
The report warns that while the impact of the European debt crisis has so far been contained, it has the real potential to derail global growth.
A prolonged period of rising high-income sovereign debt could make global borrowing more expensive for developing countries, curtail investment and growth, and ultimately result in more poverty. Developing countries with close trade and financial ties to highly-indebted high-income countries may feel serious ripple effects.
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