This will hardly be a surprise to anyone with 3 neurons to rub across their frontal lobe, but at least it is now official.
- WORLD BANK CUTS GLOBAL GROWTH OUTLOOK, SEES EURO-AREA RECESSION
Bloomberg, which just released an embargoed summary of the World Bank action, summarizes it all.
- World Bank cuts global growth forecast by most in 3 yrs as euro area recession threatens to exacerbate slowdown in emerging markets, World Bank says in Global Economic Prospects report.
- Sees world economic growth of 2.5%, down from June est. of 3.6%
- Sees euro area GDP contracting 0.3% in 2012, compared with pvs est. of 1.8% growth
- World Bank estimates euro area entered recession in 4Q
- U.S. outlook cut to +2.2% from +2.9%
- Japan forecast cut to 1.9% growth from 2.6%
- China’s GDP growth will slow to 8.4%, unchanged from interim revised projection released in Nov.
- India forecast cut to 6.5% from 8.4%
And the punchline:
- World Bank urges developing economies to “prepare for the worst” as it sees risk for European turmoil to turn into global financial crisis reminiscent of 2008
- Even achieving much weaker outcomes is very uncertain
Morgan Stanley may want to revise their 37% Muddle Through probability outcome, to something more like 36.745% on this news.