World Bank cuts global growth forecast, warns of troubled times

The World Bank has cautioned developing countries of shocks and urged them to prepare for a further downside as the euro crisis and weakening growth in several big economies will dim global growth prospects.

The bank has lowered 2012 growth forecast for developing countries to 5.4 per cent from 6.2 per cent, the estimate released in June. Global growth is now projected at 2.5 per cent and 3.1 per cent for 2012 and 2013, respectively.

"Growth in South Asia slowed to an estimated 6.6 per cent in 2011, from 9.1 per cent in 2010, reflecting a sharp slowdown in the second half of the year in India as well as external headwinds," it said. South Asia's growth is projected to ease further to 5.8 per cent in 2012, before strengthening to 7.1 per cent in 2013.