1

Where is the World Heading in 2009?

Simeon DjankovChief Economist. Finance and Private SectorWorld Bank Group

UPC Annual ConferenceLima, December 15-16

2

GDP, trade, private investment

• World GDP growth to slow to 0.9% in 2009, could be as low as 0.4%.– Lowest on record since 1970

• International trade to record a fall (-2.1%)– Lowest since 1975

• Private investment to halve– From $1.03 trillion in 2007 to about $500

billion in 2009 (for emerging markets, from 7.6% of GDP to 3%).

3

Growth in Latin America in 2009

• From 5.7% in 2007, to 4.4% in 2008, to 2.1% in 2009

• Biggest drops:– Venezuela (from 10 to 5.3 to 1% in 2009)– Argentina (from 8.7 to 6.6 to 1.5% in 2009)– Ecuador 0.8% gdp growth in 2009– Mexico (1.1%); Brazil (2.8%); Bolivia (3.6%)

4

Fastest growth in Latin America in 2009?

• Peru, projected at 5.2%

• Various reasons– Good reformer (#62 in Doing Business 2009)– Diversified exports

5

Where is the World Heading in 2009?

Simeon DjankovChief Economist. Finance and Private SectorWorld Bank Group

UPC Annual ConferenceLima, December 15-16