World Bank: Global Economy Will Contract 3% in 2009

The World Bank is forecasting that the world’s economy will contract close to 3% in 2009.

Previously, the Bank had forecast a 1.75 % contraction, but rising unemployment and underutilization of capacity have depressed the global economy more than expected.

For background, read Professor Eichengreen and O’Rourke’s essay showing that the global downturn is worse than during the Great Depression.

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