World economy 'faces slowdown'
The US economic slowdown is expected to have a big impact
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Monday, 26, Nov 2007 08:08
The global economy is set to fall to its lowest level of growth since 2002 in the next two years, according to a British economic consultancy.
The credit crunch, a slowdown in the US economy and even a post-Olympic hangover in China will contribute to the slump, the Centre for Economics and Business Research (Cebr) claims.
Its latest Global Prospects report states world economic growth will fall from 3.8 per cent in 2007 to three per cent in 2008 and remain unchanged in 2009.
High interest rates, the US housing market slump and low consumer confidence are among the factors it believes will dampen growth in the coming months.
Cebr believes a recovery from these conditions could be impeded by high energy and food prices.
It nevertheless predicts a recovery in 2010, when a resurgent US economy is expected to help the global economy bounce back to four per cent.
"Although we expect world economic growth to slow, this is partly a reflection of rapid growth in recent years," Cebr economist Sarah Bloomfield said.
"Growth will remain sanguine and is likely to return to a faster pace in 2010."