(PTI): The World Bank forecasts a 4.7 percent plunge in economic growth in developing countries for this year from 5.9 percent in 2008 over the deepening global recession.
The bank says gross domestic product (GDP) of the counties is expected to shrink by 1.6 percent if China and India are excluded.
The multilateral institution, in its latest report, also reduced its forecast on global economic growth to 3.0 percent for 2009.
The 185-nation body also warned that developing countries would face deeper lay offs and social unrest due to the current economic crisis.
The World Bank advised that global economic policies must “focus rapidly on financial sector reform and support for the poorest countries”.
The development lender voiced concern over a 49 percent plunge in flow of money into developing countries from 707 billion dollars in 2008 to 363 billion this year.
The report called on developed states to increase financial aid to developing countries in a way that helps speed up economic recovery.
“The need to restructure the banking system, combined with emerging limits to expansionary policies in high-income countries, will prevent a global rebound from gaining traction,” says Justin Lin, World Bank chief economist.
Tags: Developing countries, Slow economic growth, World Bank