The global economy is expected to contract 1.7% this year, the latest World Bank forecasts showed Tuesday. Gross domestic product, or GDP, is likely to fall 3% in OECD countries and by 2% in other high-income economies.

GDP growth in the developing world is forecast to slow to 2.1% in 2009 from 5.8% growth recorded in 2008. In November 2008, the Bank had projected 4.4% growth for developing countries.

GDP in Europe and Central Asia is expected to fall 2% in 2009 and that for Latin America and the Caribbean is predicted to decline 0.6%. GDP growth in East Asia and the Pacific is expected to ease to 5.3% in 2009, as growth in China slumps to 6.5%, and several smaller economies in the region, including Thailand fall into recession.

GDP growth for South Asia is expected to slow to 3.7% and that in the Middle East and North Africa appears least affected among developing regions, dropping just 0.3 points from earlier projections to 3.3%. Reduced oil revenues and cuts in oil output will restrain GDP among oil exporters to 2.9% from 4.5% in 2008, the World Bank said.

The World Bank's baseline forecast predicts growth momentum to turn weakly positive in 2010.

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