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BY VICTORIA CRAIG
 

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Nations of the world should prepare for a global economic crisis worse than the one in 2008.
That’s the stern warning from the World Bank, which issued a report announcing it slashed global economic growth projections for 2012. Fox Business explains the details of the report.

“World Bank, which cut its growth projections today over a recession in Europe and a slowdown in developing countries. The bank is now projecting those countries will see a growth rate of 5.4 percent this year, down from its prior projection of 6.2 percent.”

And that’s just for developing countries.
One of the authors of the report tells the BBC a slowdown in Europe could have even more severe consequences for the world’s poorest countries.

“We are concerned they have less fiscal space available to them and they would be operating in a situation where the high income countries aren’t going to be able to offer the same kind of counter-fiscal policy, the same kind of support.”

And when you take into account the poorest countries -- growth is more in the two to three percent range.
Still, a columnist for the Wall Street Journal says, the end result will not be the kind of disaster headlines suggest.

“....given that recoveries after financial crises tend to be slow, drawn-out affairs, that's not too surprising—and 2.5% is not a disaster. The global economy still has some sources of resiliency, particularly in emerging markets. Still, growth will be very uneven and there is a higher risk of a worse outcome than a pleasant economic surprise.”

Adding to that point, one CNBC contributor says the World Bank’s report might no longer be relevant. Adding, by the time the report is out, global markets are already working past the news.   

“I follow them when they come out with these reports all the time;  they’re always lagging. I know because there’s a big internal process by which they get these reports out, that their ability to respond to incoming information is, really, they’re very lag behind.”

Late or not, Fox News reports the US economy and others around the world are already seeing signs of global slowdown. Evidence you might not want to dismiss the  World Bank’s report just yet.

“Exports to Europe fell 6 percent in November, the Commerce Department said last week. That helped push the trade deficit up 10.4 percent to $47.8 billion. Global trade has also fallen, partly because banks are cutting back on a type of lending known as trade financing.”

So, how will the bank’s revised figures affect global stock markets? A reporter for CNBC tells NBC’s Today, investors shouldn’t be too concerned -- the revised projections likely won’t affect markets much at all.

“The main reason for the economic slowdown warnings is a possible recession in Europe -- something that is not a surprise to markets. And traders already consider the regions debt crisis somewhat ‘baked in’ to stock prices.”

The World Bank’s sister organization, the International Monetary Fund, is expected to update it’s World Economic Outlook late this month as well. The IMF says it will cut it’s global projections from a those it issued in September.