World Bank Sees Global Economy Shrinking 2.9% in '09
US stocks are beginning this week's trading very similarly to last week's start: with a triple-digit plunge in the Dow. Even larger losses are currently hitting the Nasdaq and S&P 500, which are down 47 and 20 points, respectively.
Traders are responding to a revised economic forecast out of the World Bank, an international financial institution that provides leveraged loans to developing countries. The World Bank said it now sees the global economy contracting by 2.9% during 2009, down from its previous forecast, made in March, of a 1.7% contraction.
In its yearly Global Development Finance report, the World Bank said leading developed nations have incorrectly focused efforts on their own economies, rather than emerging markets. To this point, the World Bank said it expects private capital flows to developing countries to decline from $1.2 trillion in 2007 to just $363 billion in 2009.
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