The World Bank has warned developing countries they need to be prepared for
shocks as global economic growth slows.
The organisation has slashed its growth forecasts, and is now predicting a 0.3%
contraction for the eurozone in 2012.
"Developing countries need to evaluate their vulnerabilities and prepare for
further shocks, while there is still time," said World Bank chief economist
Justin Yifu Lin.
"Escalation of the crisis would spare no-one," the report's author warned.
Referring to the eurozone crisis and its potential to impact growth in rich and
poor countries, Andrew Burns said:
"Developed and developing-country growth rates could fall by as much or more
than in 2008/09.
Developing world needs to prepare for global economic slowdown says World Bank
"The importance of contingency planning cannot be stressed enough."
The World Bank is predicting growth of 5.4% for developing countries in 2012
and 1.4% for high income countries, down from its forecasts of 6.2% and 2.7%
respectively in June.
The World Bank's Global Economics Prospects report says that slower growth is
already visible in global trade and commodity prices.
It said that declining commodity prices were better news for the developing
world, although food security for the poorest countries was still a major
concern.
Food prices are down about 14% from their peak in February 2011.
Analysis
image of Andrew Walker Andrew Walker BBC World Service Economics correspondent
The World Bank has a warning for the developing world: prepare for the worst.
In its Global Economic Prospects, the bank does forecast continued growth, but
warns there is a risk of a worse outcome: of another crisis as bad as what
followed Lehman in 2008.
So could the developing countries cope? After all, they weathered the previous
global recession relatively well. The Bank's view is that they, for the most
part, are in better in shape than the rich nations.
Some have scope to boost government spending and should identify now what would
most help development and the poor. But others don't have that room for
manoeuvre and will need to make cuts if there is a prolonged downturn.
Andrew Burns, manager of global macroeconomics at the World Bank, told the BBC
there was a danger that the downturn could be longer lasting than the one which
followed the collapse of Lehman Brothers in 2008.
"This time, going in, [developing countries] will be in much better condition
than high income countries, but that said, we are concerned," he said.
"They are going to be operating in a situation where the high income countries
aren't going to be able to offer the same type of counter fiscal policy and the
same type of support to the financial system as they did in 2008/9."
The World Bank warns that the sovereign debt crisis in the eurozone and the
slow growth in developing countries could "reinforce one another" causing even
slower growth than predicted.