The outlook for developing regions

Europe and Central Asia has been worst affected by recent developments. GDP in the region is expected to fall by 2 percent in 2009, compared with a 4.2 percent increase in 2008.Latin America and the Caribbean will also likely see GDP contract in 2009, although at the country level outturns may be diverse. Overall, GDP is projected to decline 0.6 percent following gains of 4.3 percent in 2008.East Asia and the Pacific is likely to be most affected by the falloff in global investment and trade. Already this has cut sharply into industrial production and capital spending. GDP growth is expected to ease to 5.3 percent in 2009, as growth in China slumps to 6.5 percent, and several smaller economies in the region, including Thailand fall into recession.Prospects for South Asia have been marked down to 3.7 percent growth for 2009, down from 5.6 percent growth in 2008. Though terms of trade have moved in the region’s favor with lower oil prices, weaker export demand is being felt sharply.Growth in the Middle East and North Africa appears least affected among developing regions, now projected to be 3.3 percent in 2009. Reduced oil revenues and cuts in oil output will restrain GDP among oil exporters to 2.9 percent from 4.5 percent in 2008.In Sub-Saharan Africa, GDP growth is expected to halve from 4.9 percent in 2008 to 2.4 percent in 2009. The dramatic shift in commodity prices will have strong effects across countries.