Vigorous expansion in developing countries is expected to temper a slowdown in the United States and buoy the world economy, the World Bank reported Wednesday.
There are concerns that the U.S., the world's largest economy, is facing a possible recession. Also, oil prices are due to gradually decline, the Washington, D.C.-based international bank forecasts.
It projects global growth to slow to 3.3 percent this year from 3.6 percent in 2007.
"Developing countries — if you add them all up now — are basically the same size as the United States," said Hans Timmer, co-author of the bank's annual "Global Economic Prospects" report.
"But they are growing more than three times as fast, and that means that their contribution to global demand is more than three times as important as the contribution of the United States," he said at the release of the report in Singapore.
The resilience of developing economies has helped lower global trade imbalances by snapping up American exports with the help of a cheaper U.S. dollar, Timmer said.
The bank said there were concerns that a faltering U.S. housing market or further financial turmoil could push the U.S. into recession and weaken demand for the products of developing countries.
"We still don't know exactly how many corpses are there still in the financial markets, and how big, ultimately, the losses will be," Timmer said.
Spillover from problems in the U.S. housing market on consumer demand should be limited, according to the bank's forecasts, and the U.S. economy should regain momentum that would lead to a pick up in world output.
Worldwide production is predicted to expand by 3.6 percent in 2009.
Gross domestic product growth for developing countries is expected to ease to 7.1 percent in 2008, while high-income countries are predicted to grow by a modest 2.2 percent, the bank said.
From NPR reports and The Associated Press.
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