The World Bank warns that Europe is headed for a recession that could spark a global crisis
Source: Press TV
The World Bank has downgraded its estimates for a global economic expansion in 2012, saying that developing countries should brace themselves for a growth slowdown.
In its Global Economic Prospects report, the bank has cited the eurozone crisis, weak economic growth and contagion from the European Union spreading to the rest of the world as reasons for lowering its 2012 global growth forecast.
The bank says that both developing and developed countries will be affected by the critical situation of the world economy.
The World Bank has lowered the 2012 global growth forecast for high-income countries from 2.7% to 1.4% and also revised the growth of developing countries down to 5.4 percent from 6.2.
It has said that it is not being cynical, however, "we are examining the possibility that things could go worse," said Andrew Burns, a manager at the World Bank.
He added that the purpose of the dismal tone of the Global Economics Prospects 2012 report is to prepare developing countries for such possibilities.
The World Bank's report comes at a time of mounting fears of a Greek default and after the Standard and Poor's (S&P) credit rating agency downgraded the ratings of nine European countries including France and Austria last week.