World Bank forecasts gloom

[Emillereid]

Apr 8, 2005

By Emad Mekay

WASHINGTON - World economic growth will slow this year to 3.1% because of rises in interest rates in the United States and the value of the euro, coupled with a slump in demand for exports from developing nations, the World Bank said in its annual forecast.
<snip>

The World Bank forecasts that increases in US interest rates and the effects of the 25% appreciation of the euro since February 2002 will continue to contribute to a slowing of gross domestic product (GDP) growth in the second half of 2004 and into 2005 in developed nations. GDP growth among high-income countries will ease to about 2.4% in 2005, it said.

Among the other risks facing the global economy is the possibility of an abrupt increase in interest rates, a further large and steep depreciation of the US dollar and a larger-than-anticipated hike in oil prices. This could trigger not only a significant global slowdown but potentially a world recession, warned the bank. "We should also keep in mind that current global financial imbalances pose risks - of disorderly exchange rate movements or of interest rate increases - that could threaten these gains," said Francois Bourguignon, the World Bank's chief economist. "Developing countries need to prepare themselves for adjustments, some of which could be sudden."

The report counted the US$666 billion US current account deficit, now equivalent to 5.6% of the US GDP, as a major threat to global growth. The deficit means that many developing countries are acquiring surpluses of foreign reserves. The World Bank warned that this excessive accumulation of foreign reserves could open those countries to risks associated with future exchange rates and fiscal costs. "As a result, high-reserve countries may need to re-evaluate the desirability and sustainability of continued reserve accumulation," the bank said. Foreign reserves held by developing countries grew by $378 billion in 2004 to an estimated $1.6 trillion - an all-time high. China held $610 billion while India held $125 billion and the Russian Federation $114 billion. ..........

http://www.atimes.com/atimes/Global_Economy/GD08Dj01.html

[Flammable Materials]

1. $666 billion ...The Deficit Of The Beast n/t

[Emillereid]

3. Holy Mackeral -- Bush is the anti-christ afterall.

I knew there was something a little strange about him.

[SpiralHawk]

5. George W. Bush linked to the NumBer of the bEasT

and his daughter, Jenna, doing the boogabuttaloo or whatever, while White House porn-prostitute-jounralist "Jeff 'Bulldog' Gannon" prepares to speak at the National Press Club during the New Moon eclipse at 20 degrees of Aries.

My, my, my, what is this world coming to?

Wait, don't answer that.

The Beast is Eating our national budget !

[KlatooBNikto]

2. The gloom factor went up by a factor of 100 because Wolfie joined

the World Bank.

[whistle]

4. Any big economic slowdown for the U.S. will cause both the federal

...budget deficit and the international trade deficit to explode.

[BeFree]

6. ......

The World Bank warned that this excessive accumulation of foreign reserves could open those countries to risks associated with future exchange rates and fiscal costs. "As a result, high-reserve countries may need to re-evaluate the desirability and sustainability of continued reserve accumulation,"

The only way to reduce their reserves is to buy American goods; sending the money back here. So demand for American goods could rise creating inflation for American goods, meaning we will pay more for our own stuff.

Real estate could be helped, but I can't think of much else we can sell.

As the dollar goes down foreign held reserves go down in equal value. China must have lost billions recently. We don't need to piss off the Chinese, eh?

[chlamor]

7. Worldwide homelessnes/displacement is escalating