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| Version 0 | Version 1 |
|---|---|
| World Bank: Developing nations face weak growth | World Bank: Developing nations face weak growth |
| (40 minutes later) | |
| Developing nations should brace themselves for weak growth and "tougher times", the World Bank has warned. | Developing nations should brace themselves for weak growth and "tougher times", the World Bank has warned. |
| It said that there may be "a long period of volatility in the global economy" as the eurozone debt crisis escalates. | It said that there may be "a long period of volatility in the global economy" as the eurozone debt crisis escalates. |
| The bank forecast that developing economies will grow by 5.3% this year, down from 6.1% in 2011. | The bank forecast that developing economies will grow by 5.3% this year, down from 6.1% in 2011. |
| It urged policymakers to take adequate long-term measures to ensure that they can sustain growth. | It urged policymakers to take adequate long-term measures to ensure that they can sustain growth. |
| "Developing countries should focus on productivity-enhancing reforms and infrastructure investment instead of reacting to day-to-day changes in the international environment," said Hans Timmer, director of development prospects at the World Bank. | "Developing countries should focus on productivity-enhancing reforms and infrastructure investment instead of reacting to day-to-day changes in the international environment," said Hans Timmer, director of development prospects at the World Bank. |
| Increased threat | |
| The World Bank warning comes amid heightened fears about the eurozone debt crisis spreading to the region's bigger economies such as Spain and Italy. | |
| The borrowing costs for these nations have risen significantly, raising concerns about their ability to replay their debts. | |
| On Tuesday, the benchmark 10-year bond yield for Spain hit 6.81%, the highest rate since the launch of the euro in 1999. | |
| Meanwhile, Italy's 10-year bond yield rose to 6.28%, a rate not seen since January this year. | |
| This followed a 100bn-euro ($125bn; £80bn) bailout of Spanish banks over the weekend. | |
| There are fears that as the crisis escalates it will hurt investor sentiment in Europe and dent demand. | |
| That does not bode well for developing economies, especially in Asia, which rely heavily on demand from the eurozone for their exports. | |
| "The problems are serious and developing countries should reckon with a long period of low growth in Europe," said Mr Timmer. | |
| Mr Timmer added that there was possibility of "a further crisis in Europe" and that developing nations should prepare themselves for any such scenario. |