The World Bank has warned that following on from the European debt crisis a global recession is becoming more and more likely. The bank stated that the Eurozone is already in recession, though whether or not the Eurozone ever really came out of recession is a matter for debate. However, they also went on to state that the Eurozone is likely to contract by around 0.3% this year which create a domino effect for other countries around the world.
The IMF is also expected to release a bleak review suggesting that even the economies of the fast growing BRIC nations have slowed down over 2011. Andrew Burns the manager of global macroeconomics at the World Bank has stated that,
“Developed and developing country growth rates could fall by as much or more than 2008 – 2009”.
In short it appears that we should be bracing ourselves for another global economic recession which is likely to be worse than the last one. While some measures such as interest rates cuts and quantitative easing were taken to solve the economic crisis in 2008 and 2009 the correct procedure in the event of another international down turn is as yet unknown. However, it is clear that even if the new BRIC economies are affected it is likely that the established economies of Europe and the USA will be taking the biggest hit.