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China growth to offset downturn for developing countries

China growth to offset downturn for developing countries article image

Developing economies will grow just 1.2 percent this year, down from 5.9 percent growth last year and just a fraction of the 8.1 percent growth recorded in 2007. However, without growth from China and India, gross domestic product in the remaining countries will fall by 1.6 percent, predicts the bank, "causing continued job losses and throwing more people into poverty". The World Bank has raised its predictions for China's economic growth from 6.5 percent to 7.2 percent this year, and 7.7 percent next year. India is projected to grow 5.1 percent this year and eight percent in 2010. The bank also flagged problems with private capital flows to developing countries, which has fallen by 49 percent this year. "Today, developing countries rely heavily on private flows and many countries are being hit by a collapse in corporate finance, with big companies and banks that were powering growth now in distress," read the bank's Global Development Finance 2009: Charting a Global Recovery report. "The risk of balance-of-payments crises and corporate debt restructurings in many countries warrant special attention."

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