Passage 1
The global economy is set for a year of recession and then low growth until 2012, economists at the World Economic Forum in Davos have said. They also warned that the downturn could persuade politicians to introduce trade barriers and steer investments only into their own economies. This would harm developing countries mostly. Meanwhile,they are growing calls for better financial sector regulation. Speaking at a panel taking stock of the state of the economy, Stephen Roach, Chairman of Morgan Stanley Asia and long-time prophet of the economic downturn, said one could not "overestimate the dangers the world economy faces in 2009.”
The global economy was likely to shrink this year for the first time since World War II, he said, and nobody on the panel or in the audience was prepared to contradict him. The general gloom was echoed by the IMF, which has predicted that world economic growth will fall to just 0.5% this year, its lowest rate for 60 years. Justin Yifu Lin, senior vice presiden at the World Bank, said there were "lots of downside risks; the current projection is protracted recession and we have not reached the bottom yet"
Demand from U. S. consumers, for many years the main driver of global growth, was in steep decline, and while on the supply-side China had seen its economy shrink during the last quarter of 2008. Indeed, wherever one goes in the congress centre in Davos, pessimism pervades all conversation-although one participant counseled that "irrational exuberance has been replaced by irrational despair".
The biggest concern of all panelists, however, was the risk that the downturn could herald a return to protectionism. This being Davos, the majority of participants are proponents of free trade, but it was striking that the representatives from developing and emerging economies were particularly worried about rising trade barriers. Panelists warned not just about the threat to free trade, but also the danger that Western governments could steer their nationalized or recapitalized banks towards investing only at home.
However, government spending alone was not enough to solve the problem.
Monetary policy and a coordinated global regulatory framework were keys to getting the global economy back on track.
18.According to Justin Yifu Lin, senior vice president at the World Bank, the economic recession has reached the bottom.