World Bank cuts growth forecast amid global financial crisis

The bank also lowered its growth forecast for developing country economies to 4.5% for 2009, compared to a previous projection of 6.4% in June.

The revision was due to "a combination of financial turmoil, slower exports and weaker commodity prices," said the bank in a statement.

It also expected high income country economies to contract by 0.1% next year, compared to a previous projection of 2%.

Calling for a rapid response to the spreading global financial crisis, the World Bank said it would make new commitments of up to $100 billion over the next three years to the developing countries.

"This increase in financial support will protect the poorest and most vulnerable from harm, support countries facing big budget short-falls, and help sustain long-term investments upon which recovery and long-term development will depend," said the World Bank in a statement.

"Leaders are meeting on Saturday to discuss the global financial crisis must not lose sight of the human crisis. As always, it is the poorest and most vulnerable who are the hardest hit," said World Bank President Robert B. Zoellick.

"The response to this crisis must be global, coordinated, flexible and fast.

“While the challenges need to be addressed at the country level, it is more critical than ever that the international community acts in a coordinated and supportive way to make each country's task easier," he said.

Article published courtesy of BuaNews