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03 June 2023

Developing nations to grow 5% in 2009

Justin Yifu Lin (SUPPLIED)

By Reuters

Economies of developing countries are seen growing up to five per cent in 2009, while industrialised countries will shrink due to the global financial crisis, the World Bank's chief economist said.

The gross domestic product (GDP) for developing countries is expected to grow on average three to five per cent this year, but will fall around one per cent in industrialised countries, said Justin Yifu Lin.

Lin said there was hope the global economy would come out of recession next year but only if governments increased spending to boost demand.

"Are we going to have a recovery in 2010? Why not? Certainly we hope, but there are some reasons to be cautious," he said.

"It depends on how governments in the world are going to respond to challenges, if governments didn't respond well... it may not be one year or two years, it may be even a longer global recession," he said.

Industrialised countries should adopt fiscal stimulus packages and invest in infrastructure projects and help developing countries by investing in neglected sectors, Lin said.

"I can see in most African countries transport is very bad. Also in African countries many factories have access to electricity only for two or three days a week, so you can increase the electricity supply," Lin said.