POWERED BY MOMENTUM MEDIA
Second GFC a genuine threat: World Bank
The World Bank has issued a dire outlook for the global economy, warning that the world could suffer a recession "as large or even larger than that of 2008-09".
In its Global Economic Prospects 2012 report, the World Bank said that sovereign debt crisis in the eurozone worsened considerably in August 2011.
"While [the eurozone crisis is] contained for the moment, the risk of a much broader freezing up of capital markets and a global crisis similar in magnitude to the Lehman crisis remains," said the report.
As a result, the World Bank has revised its global growth forecast for 2012 down to 2.5 per cent, and 3.1 per cent in 2013. This is down from June forecasts of 3.6 per cent growth for both 2012 and 2013.
Breaking the 2012 growth prediction down to regions, the developing world is expected to grow by 5.4 per cent and high-income countries are predicted to grow by 1.4 per cent. The eurozone will contract by 0.3 per cent, according to the report.
Emerging markets are not as well placed for a second global downturn as they were in 2008, warned World Bank director of development prospects Hans Timmer.
"Developing countries should pre-finance budget deficits, prioritise spending on social safety nets and infrastructure, and stress-test domestic banks," Timmer said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
