The World Bank has thrown a dampener on excess enthusiasm about a recovery.
Here are the two main news stories in this.
As well the Bank makes regional forecasts which can be summarised as follows: -
Europe and Central Asia
Gross domestic product (GDP) is expected to shrink by 4.7pc this year, recovering to grow by 1.6pc in 2010
East Asia and Pacific
Overall, the region's economy is expected to grow by 5pc this year, although several countries will see their GDP fall. GDP in the region is expected to grow by 6.6pc in 2010.
South Asia
The region's growth is set to slow to 4.6pc from 6.1pc in 2008. GDP growth is set to rise to 7pc in 2010.
Latin America and the Caribbean
Falling commodity prices and the withdrawal of foreign funds have hit the region, with GDP set to shrink by 2.3pc this year. The region is forecast to return to growth of 2pc next year.
Middle East and North Africa
The region has been less affected by the credit crunch than much of the world, with GDP expected to grow by 3.1pc this year, climbing to 3.8pc in 2010.
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Sub-Saharan Africa
Growth is expected to drop to 1pc from 5.7pc on average over the past three years, the Bank said. Growth is expected to recover to 3.7pc next year.
Christina Speight
TELEGRAPH
22.6.09
1. World Bank cautions against recovery talk
The World Bank today poured cold water on the chances of a robust recovery for the global economy next year, warning instead that the weakness of banks and rising unemployment will cast heavy shadows in 2010.
The Bank also delivered a more pessimistic outlook for this year, expecting the world's gross domestic product (GDP) to contract by a record 2.9pc. In March it had predicted a decline of 1.7pc.
Although acknowledging that major economies are no longer in free fall, the World Bank is far more cautious than the International Monetary Fund about the strength of a recovery.
The Bank explained its caution comes "partly because this downturn follows a financial crisis - which tends to be deeper and longer-lasting than normal ones - and partly because today's downturn has affected virtually the entire world."
It does expect global GDP to rebound to 2pc next year and 3.2pc in 2011 - weaker than the expansion enjoyed in recent years.
Experts are divided on how quickly a recovery will emerge given the stresses still facing banks and rising unemployment in many parts of the world. The US and China, according to the Bank's report, are the economies that look closest to emerging from the downturn.
The report also issued a bleak outlook for the world's second and third-tier economies, as investment and trade flows dry up. Excluding China and India - the biggest emerging economies - the Bank expects gross domestic product for developing economies to contract 1.6pc this year.
The prospect of more currency crises is growing as countries face a double squeeze from declining exports and a depreciation in their own currency rates. After peaking at $1.2 trillion in 2007, the Bank expects the amount of money going into developing economies to tumble to $363bn this year.
"To prevent a second way [wave?] of instability, policies have to focus rapidly on financial sector reform and support for the poorest countries," said Hans Timmer, a director at the World Bank.
2. Markets tumble on World Bank's global economy fears
Global stock markets tumbled yesterday on renewed concerns about the health of the world economy.
By Rupert Neate
Global stock markets tumbled on Monday on renewed concerns about the health of the world economy.
The FTSE 100 index lost 111 points, or 2.6pc, to 4,234 – its lowest level since April. Only four companies in the blue-chip index managed to end the day in positive territory as a drop in commodity prices knocked mining and oil companies.
The oil price fell $1.92 to $67.27 a barrel, and the price of copper fell more than 5pc to a three-week low on the London Metal Exchange.
In America the Dow Jones was down 2pc to 8,370 in mid afternoon trading.
Investors were shaken by a report from the World Bank which warned that the global economy would fall 2.9pc this year before rebounding in 2010.
Stock markets in Germany and France also fell by 3pc. David Jones, chief market strategist at IG Index, said: "The concern seems to be that we were all perhaps a little too soon in thinking that the worst of the economic slowdown was behind us, and for now at least, discretion may be the better part of valor – until there are more concrete signs of a sustainable recovery
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