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CIAO Focus, September 2009: The Global Economic Crisis (Part II)

• The global economy is projected to fall by 2.9%, according to latest Bank estimates from June 2009. And world trade is projected to fall by 10%.
• Developing countries are expected to grow by only 1.2% this year.
• Growth is expected to revive during 2010, but the poor in many developing countries will continue to hurt because they have less cushion to protect themselves.
• Private capital flows could drop to $363 billion this year. Many countries will find it difficult to meet external financing needs, estimated at $1 trillion.
• The overall financing gap this year for developing countries will be between $350 billion to $635 billion.
• Concerted global action is needed while the crisis is still underway.
• There is not enough public money to solve the crisis; the recovery strategy needs to encourage private business and financing
• As many as 90 million more people could be trapped in poverty as economic growth slows around the world in 2009, according to Bank forecasts. This is on top of the 130-155 million people pushed into poverty in 2008 because of soaring food and fuel prices.
• More than 1 billion people could go chronically hungry this year, according to projections. This would reverse gains in fighting malnutrition. 
• Infant mortality is set to soar due to countries’ lower growth rates. Between 1.4 and 2.8 million more babies may die in the next five years, if the crisis persists.
• Sharply tighter credit conditions and weaker growth are cutting into government revenues and their ability to invest to meet education, health and gender goals, as well as the infrastructure expenditures needed to sustain growth.

Source: The World Bank

 

From the CIAO Database:

Latin America and the Global Economic Crisis

Trade and the Global Economic Crisis: Immediate Challenges and Long-term Threats

Global Imbalances and the Financial Crisis

Financial Crisis and Public Policy

 

Outside Sources: *

The Global Economic Crisis (Peterson Institute for International Economics)
http://www.iie.com/research/topics/hottopic.cfm?HotTopicID=15

ILO and the Global Job Crisis (International Labour Organization)
http://www.ilo.org/pls/apex/f?p=jobcrisis:1:1263431525670280

Finance crisis: In graphics (BBC)
http://news.bbc.co.uk/2/hi/business/7644238.stm

Global Financial Stability Report (IMF)
http://www.imf.org/external/pubs/ft/gfsr/2009/01/index.htm

Credit crunch – the EU at work
http://ec.europa.eu/commission_barroso/president/focus/credit_crunch/index_en.htm

UNDP’s response to the Global
Economic Crisis
http://www.undp.org/publications/fast-facts/FF-economic-crisis.pdf

* Outside links are not maintained. For broken outside links, CIAO recommends the Way Back Machine.