World economic catastrophe!


As you may have read, the World Bank has issued its half yearly update, Global Economic Prospects, causing a major stir with a pretty nasty forecast of 2.5% global growth with risks to the downside if Europe gives us a credit event.

I’ve attached the report below – rare as hens teeth these are, has taken me all day to find it – for your reading pleasure. It’s all pretty reasonable and no doubt they’ll be very happy to be an institution that has finally gotten out in front of a crisis.

To my mind the global growth projection is reasonable. The doomsday scenario is in the lap of the gods. As well, I was struck by the simply impossible task confronting the endeavour of any such report. Infinite variables and at a magnitude that is impossible to grasp. It’s a heroic effort but one can’t escape the sneaking feeling that they might just have called the bottom.


Oh, and it appears Australia is indeed exceptional, only getting a mention twice, once in a table of falling confidence, where we looked confident as anything and another mention later on when discussing nickel. Didn’t even make it into the section on the risks to externally funded economies.

Downunder up top it (or just invisible, see comments).


GEP January 2012a Full Report FINAL

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.