Continued robust expansion in developing countries will help offset a slowdown in the United States this year amid concerns of a possible recession in the world's largest economy, the World Bank said Wednesday.
The Washington, DC-based international bank forecast global growth to moderate to 3.3 percent this year from 3.6% 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 launch of the report in Singapore.
Not only has the resilience of developing economies mitigated the slowdown in the US economy, it has also helped reduce global trade imbalances by sucking up American exports with the help of a cheaper US dollar, he said.
The bank said there were concerns that a faltering US housing market or further financial turmoil could push the US into recession and weaken demand for the products of developing countries.
The bank believes, however, that the spillover from problems in the US housing market on consumer demand will be limited.
It expects the US economy to regain momentum and lead to a pick up in world output, which it predicts will expand by 3.6% in 2009.
Gross domestic product growth for developing countries is expected to ease to 7.1% in 2008, while high-income countries are predicted to grow by a modest 2.2%, the bank said.