The global financial crisis is really starting to hit home with the World Bank predicting the global economy will shrink for the first time since World War II.
The World Bank is predicting the crisis will force another 46 million people into poverty and developing countries will experience possible political unrest.
The bank’s president Robert Zoellick has said that there needs to be a global solution to the crisis, with everyone working together.
“This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis.”
“We need investments in safety nets, infrastructure and small and medium size companies to create jobs.”
Asian countries have been the worst hit, with Japan logging a deficit of 172.8 billion yen in January. The downfall in Asia will severely affect Australian exports.
Westpac economists have also predicted dire outcomes, downgrading the bank’s expectations for the Australian economy.
“We anticipate a 25 percent drop in business investment over the next two years, consistent with past recessions,” they said.
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