World Bank issues warning

The World Bank is warning the Caribbean and other developing nations that there could be a major slowdown in global growth this year.



The Washington-based financial institution has lowered its growth forecasts for high-income and low-income countries, saying it expects the world economy to expand by an aggregate 2.5 per cent in 2012, down from about 2.7 per cent in 2011.



In its previous estimate in June, the World Bank had forecast growth of 3.6 per cent in 2012.



The bank has also warned of the continued threat of a global financial shock similar in magnitude to the Lehman crisis, because of the possibility that a major European economy could be shut out of the global debt markets.



In that case, the bank estimated the damage to the world’s economic growth would rival the recession of 2008 and 2009.