Wednesday, January 18, 2012

World Bank admits Europe in recession and to prepare for the worst

On Janury 17th, representatives from the World Bank publically admitted that the Euro Zone is an area wide recession, and for the member states to prepare for the worst as it continues to escalate in stature.

Bloomberg, which just released an embargoed summary of the World Bank action, summarizes it all.
  • World Bank cuts global growth forecast by most in 3 yrs as euro area recession threatens to exacerbate slowdown in emerging markets, World Bank says in Global Economic Prospects report.
  • Sees world economic growth of 2.5%, down from June est. of 3.6%
  • Sees euro area GDP contracting 0.3% in 2012, compared with pvs est. of 1.8% growth
  • World Bank estimates euro area entered recession in 4Q
  • U.S. outlook cut to +2.2% from +2.9%
  • Japan forecast cut to 1.9% growth from 2.6%
  • China’s GDP growth will slow to 8.4%, unchanged from interim revised projection released in Nov.
  • India forecast cut to 6.5% from 8.4%
And the punchline:
  • World Bank urges developing economies to “prepare for the worst” as it sees risk for European turmoil to turn into global financial crisis reminiscent of 2008
  • Even achieving much weaker outcomes is very uncertain - Zerohedge

Sadly, you know things REALLY have to be bad when the central banks actually tell the public the truth, and something we already knew, since over the last year these same institutions kept giving the world a false bill of sale on just how critical the Euro economic system really is.


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