WASHINGTON, DC: The global economy will grow by 2.5% in 2008 and just 0.9% next year, the slowest rate of expansion since 1982, while the volume of world trade will also decline by 2.1% in 2009, according to forecasts from the World Bank.
Major issues restricting global growth are the reigning-in of spending by US consumers, slowing growth rates in China, fluctuating prices for oil and commodities, and the lack of an obvious way to promote a large-scale economic recovery.
According to the Bank's estimates, global trade will increase rise by 6.2% this year, and contract by 2.1% in 2009, constituting the first instance of negative growth since a 1.9% fall in 1975.
Developing economies will register annual average growth of 4.5% in 2009, which effectively constitutes a recession in many nations needing to provide employment for their fast-growing populations.
Private capital investment in developing economies is also set to fall to $530 billion (€410bn; £358bn) next year, compared with a total of $1 trillion in 2007, when annual investment growth rose by 13%.
Says Justin Lin, chief economist of the World Bank: "The financial crisis is likely to result in the most serious recession since the Great Depression.
"It is not just a supply shock. It is not just a drop in demand. It is a lack of availability of credit."
Data sourced from International Herald-Tribune; additional content by WARC staff