World Bank: Global Economy Will Shrink in 2009

WASHINGTON (RushPRnews) 09 March 2009-The World Bank says it believes the global economy will shrink in 2009, for the first time since World War II.In a paper released Sunday, the bank also said it expects world trade to fall by the largest amount in 80 years, with the sharpest losses in Asia.

The report said the global financial crisis will create a multi-billion dollar financing shortfall for poor and developing countries. The bank says only one in four vulnerable developing countries will be able to ease the impact of the economic downturn through job creation or safety net programs.

According to the bank, global industrial production could be 15 percent less in 2009 than 2008.

World Bank President Robert Zoellick called for investment to create jobs and to avoid social and political unrest.

In an interview published Monday in the Financial Times newspaper, Lawrence Summers, a top economic advisor to President Obama, urged world leaders to pump more money into the world economy to boost demand and lift the world out of recession.

Japan’s finance ministry reported Monday the country had its first trade deficit in 13 years in January as the global recession diminished demand for its exports.

Tokyo’s trade deficit amounted to about $1.8 billion. Japan’s exports to the United States were down 52.9 percent in January.

Some information for this report was provided by AFP, Bloomberg and Reuters.