Business
World Bank, IMF forecast slower growth for CARICOM states in 2012
The World Bank is urging the Caribbean nations to start planning for a major slowdown in global growth this year.
The Washington-based financial institution, in a report released Tuesday, lowered its growth forecasts for high-income and low-income countries, saying it expected the world economy to expand an aggregate 2.5 percent in 2012, down from about 2.7 percent in 2011.
In its previous estimate, in June, it forecast growth of 3.6 percent in 2012.
The bank 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.
“The largest economy in the world is weakening,” said Justin Yifu Lin, the bank’s chief economist, referring to the European Union.
“The message for Caribbean countries is to start preparing now.”
The report was issued as forecasters warned of slower growth in the United States. Estimates of the nation’s annual pace of growth reached as high as four per cent in the final months of 2011.
