'Global Economy To Shrink 3%...

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[(Reuters) The World Bank&nbsp;has said the global economy will shrink 3 per cent in 2009, much worse than expected earlier, with most of the developed nations projected to witness contraction. &quot;The global economy will decline this year by close to 3 per cent, a significant revision from a previous estimate of 1.75 per cent. Most developing country economies will contract this year and face increasingly bleak prospects unless the slump in their exports, remittances, and foreign direct investment is reversed by the end of 2010,&quot; the World Bank said in a statement. The World Bank Group President Robert B. Zoellick said the world economy is set to contract this year by more than previously estimated, and &quot;poor countries will continue to be hit hard by multiple waves of economic stress.&quot; Even with the stabilisation of financial markets in many developed economies, unemployment and under-utilisation of capacity continue to rise, putting downward pressure on the global economy, the multilateral lending agency noted. &quot;Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks,&quot; Zoellick said.. The overall financing gap for developing countries would be between USD 350 billion to USD 635 billion in 2009. Waves of economic pain continue to hurt the developing worlds poor, who have less cushion to protect themselves,&quot; Zoellick said. The World Bank President pointed out that some of the main risks to the world economy include guarding against a rise in protectionism, rolling over large amounts of private sector debt in developing countries and cleaning up the balance sheets and recapitalising banks. Further, Zoellick noted that low income countries that have limited borrowing capacity due to low reserves and drained national budgets will face particular difficulties in getting sufficient finance in the next few years. &quot;There is not enough public sector money to solve the global crisis, so the recovery strategy needs to encourage private business and financing too,&quot; he added. (PTI)