17 Jan 2012

WORLD BANK / GLOBAL ECONOMIC PROSPECTS 2012

The latest economic prospects from the World Bank says that there is concern that a global slowdown could heavily impact developing countries. If the European crisis deteriorates further, growth in developing countries could be significantly reduced. WORLD BANK

Posted at: January 17, 2012 7:39 pm

Duration: 02:24

Available in: SD

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STORY: WORLD BANK / GLOBAL ECONOMIC PROSPECTS 2012
TRT: 2.24
SOURCE: WORLD BANK / IMF
RESTRICTIONS: EMBARGOED UNTIL JANUARY 17, 2012, 09:00PM EST (02:00 GMT)
LANGUAGE: ENGLISH/ NATS

DATELINE: 12 JANUARY 2012, WASHINGTON DC/ FILE

SHOTLIST:

FILE – IMF - PARIS, FRANCE – RECENT

1. Wide shot, Arc de Triomphe
2. Tilt down, l'Assemblée Nationale sign
3. Various shots, market

WORLD BANK - 12 JANUARY 2012, WASHINGTON DC

4. SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"We have seen capital flows to developing countries decline by almost 50 percent and we are really beginning to see some of these effects in terms of activity. We have developing countries, the major developing countries offering slower growth now than they were earlier and that happening at the same time as Europe enters into a recession offers a pretty worrisome conjuncture."

FILE – RECENT, MADRID, SPAIN

5. Tilt down, building
6. Med shot, women using ATM machine

WORLD BANK - 12 JANUARY 2012, WASHINGTON DC

7. SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"Obviously if what is happening in Europe were to deteriorate significantly is going to have important impacts for developing countries. We ran some scenarios here: were that crisis to become more serious, growth in developing countries could decline by almost some 4 percentage points, GDP be lower by 4 percentage points; that is a very significant slowdown."

FILE – WORLD BANK - JULY 2009, MALAWI

8. Wide shot, grain market
Close up, grain market

WORLD BANK - 12 JANUARY 2012, WASHINGTON DC

9. SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"Developing countries really have to prepare for the unexpected, if you wish. What we are really suggesting to do is take a look at their current situation, take a look at their current spending, and take a cold heart look at what might happen and plan ahead a little bit."

FILE – IMF - RECENT - LONDON, ENGLAND

10. Wide shot Canary Wharf 
11. Med shot, Barclays 
12. Close up, HSBC
 
WORLD BANK - 12 JANUARY 2012, WASHINGTON DC

13. SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"We see oil prices potentially declining by as much as 20 percent that is going to have important impacts for the fiscal balances of oil exporting countries; it is going to have important impacts also for countries that are important exporters of metals and minerals. On the other hand it is going to be a positive for importers of those commodities."

FILE – WORLD BANK - JUNE 2008, VIETNAM

14. Wide shot, rice fields
15. Med shot, women cultivating onions

FILE – WORLD BANK - JUNE 2009, CHINA

16. Various shots, woman in kitchen cooking rice

STORYLINE:

Developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, says the World Bank in the newly-released Global Economic Prospects (GEP) 2012.

SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
 "We have seen capital flows to developing countries decline by almost 50 percent and we are really beginning to see some of these effects in terms of activity. We have developing countries, the major developing countries offering slower growth now than they were earlier and that happening at the same time as Europe enters into a recession offers a pretty worrisome conjuncture."

The Bank has lowered its growth forecast for 2012 to 5.4 percent for developing countries and 1.4 percent for high-income countries (-0.3 percent for the Euro Area), down from its June estimates of 6.2 and 2.7 percent (1.9 percent for the Euro Area), respectively. Global growth is now projected at 2.5 and 3.11 percent for 2012 and 2013, respectively.

SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"Obviously if what is happening in Europe were to deteriorate significantly is going to have important impacts for developing countries. We ran some scenarios here: were that crisis to become more serious, growth in developing countries could decline by almost some 4 percentage points, GDP be lower by 4 percentage points; that is a very significant slowdown."

Slower growth is already visible in weakening global trade and commodity prices. Global exports of goods and services expanded an estimated 6.6 percent in 2011 (down from 12.4 percent in 2010), and are projected to rise by only 4.7 percent in 2012. Meanwhile, global prices of energy, metals and minerals, and agricultural products are down 10, 25 and 19 percent respectively since peaks in early 2011.

SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"Developing countries really have to prepare for the unexpected, if you wish. What we are really suggesting to do is take a look at their current situation, take a look at their current spending, and take a cold heart look at what might happen and plan ahead a little bit."

Declining commodity prices have contributed to an easing of headline inflation in most developing countries. Although international food prices eased in recent months, down 14 percent from their peak in February 2011, food security for the poorest, including in the Horn of Africa, remains a central concern.

SOUNDBITE (English) Andrew Burns, Lead Author Global Economic Prospects (GEP) 2012:
"We see oil prices potentially declining by as much as 20 percent that is going to have important impacts for the fiscal balances of oil exporting countries; it is going to have important impacts also for countries that are important exporters of metals and minerals. On the other hand it is going to be a positive for importers of those commodities."

Developing countries have less fiscal and monetary space for remedial measures than they did in 2008/09. As a result, their ability to respond may be constrained if international finance dries up and global conditions deteriorate sharply.

While prospects in most low-and middle-income countries remain favourable, the ripple effects of the crisis in high-income countries are being felt worldwide. Already, developing country sovereign spreads have increased 45 basis points on average and gross capital flows to developing countries plunged to $170 billion in the second half of 2011, compared with $309 billion received during the same period in 2010.