Economic growth in the developing world is expected to slow sharply in 2009 as the global economy deteriorates, the World Bank said Tuesday.

Gross domestic product (GDP) in the developing world will grow by just 2.1 percent this year, sharply down from the 5.8 percent growth rate in 2008, the bank predicted in its Global Economic Prospects update.

The projected pace of growth, which is also sharply slower than the 4.4 percent growth the bank forecast for the developing world in November 2008, reflects the rapid deterioration of global financial and economic conditions.

Meanwhile, the bank expected global growth to contract by 1.7 percent this year, the first decline since World War II.

GDP is projected to decline by 3 percent in OECD (Organization for Economic Cooperation and Development) countries and by 2 percent in other high-income economies.

In 2010, growth momentum will turn weakly positive as financial-sector consolidation, lost wealth and knock-on effects from the financial crisis continue to dampen economic activity.

However, the pace and timing of recovery is still highly uncertain, according to the bank.

The bank stressed that even though growth should rebound -- albeit slowly -- economic activity will remain depressed, with unemployment and significant sectoral adjustment persisting for the next two years.

"Even if global growth turns positive again in 2010, output levels will remain depressed, fiscal pressures will mount, and unemployment levels will rise further in virtually every country well into 2011," said Hans Timmer, manager of the Global Trends Team in the World Bank's Development Prospects Group.

By region, the bank forecast that GDP in Europe and Central Asia will fall by 2 percent in 2009, compared with a 4.2 percent growth in 2008.

Latin America and the Caribbean will also likely see GDP contract in this year, although outturns may be diverse at the country level. Overall, GDP is projected to decline 0.6 percent following gains of 4.3 percent last year.

GDP growth in East Asia and the Pacific is expected to ease to 5.3 percent in 2009, as growth in China slumps to 6.5 percent and several smaller economies in the region, including Thailand, fall into recession.

Prospects for South Asia have been marked down to 3.7 percent growth for 2009 from earlier forecast of 5.4 percent -- and down from 5.6 percent growth in 2008.

Growth in the Middle East and North Africa appears least affected among developing regions, dropping just 0.3 points from earlier projections to 3.3 percent. Reduced oil revenues and cuts in oil output will restrain GDP growth among oil exporters to 2.9 percent from 4.5 percent in 2008.

In Sub-Saharan Africa, GDP growth in 2009 is expected to halve from 4.9 percent in 2008 to 2.4 percent, dropping 1.8 points below earlier projections. The dramatic shift in commodity prices will have strong effects across countries, according to the bank.

Source: Xinhua