Tuesday, June 23, 2009

World Bank and Standard Bank wait till mid-year to cut their growth forecasts for 2009 - SHOOT predicted a chronic recession months ago

SHOOT: I read with some incredulity Standard Bank's forecast for 2009 earlier this year, as well as all the bubbly spin coming from the Reserve Bank and the markets themselves. Everyone was very iffy about using the 'R' word. So was the rest of the country. But the condition-that-must-not-be-named was already a foregone conclusion. Pssst. So is the 'D' word. D is for Depression. How do I know? Because the US is already at 10% unemployment in some states, and while negative growth is slowing, it's still continuing. A Depression is loosely characterized as a 10% or more decrease in GDP. Global trade is expected to plunge by 9.7 percent this year. Do you really want to play semantics? Saying contraction is slowing or you're aging slowly is not the same as growth or immortality, but the market would like you to think so.
clipped from finance.yahoo.com

BEIJING (AP) -- The World Bank has cut its 2009 global growth forecast, saying the world economy will shrink by 2.9 percent and warning that a drop in investment in developing countries will increase poverty.

"The global recession has deepened," the Washington-based multilateral lender said in a report.

Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent, the bank said. It said economic growth in developing countries should slow to 1.2 percent -- but excluding relatively strong China and India, developing economies will contract by 1.6 percent.

The bank's latest forecast is a sharp reduction from its March prediction of a 1.7 percent global contraction, which it said then would be the worst on record.

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