[Cid_Yama]

The United Nations says the world economy faces its worst downturn since the Great Depression.

This would mark the world economy's first year of contraction since the 1930s, the UN said.

The report added there had been complacency about the impact of the financial crisis on poorer countries.

"It seems inevitable that the major countries will see significant contraction in the immediate period ahead and that recovery may not materialise any time soon, even if the bail-out and stimulus package succeed," it says.

http://news.bbc.co.uk/2/hi/business/7757506.stm

[wisconsin_cur]

WASHINGTON — The world economy is on the brink of a rare global recession, the World Bank said in a forecast released Tuesday, with world trade projected to fall next year for the first time since 1982 and capital flows to developing countries predicted to plunge 50 percent.

The projections are among the most dire in a litany of recent gloomy forecasts for the world economy, and officials at the World Bank warned that if they proved accurate, the downturn could throw many developing countries into crisis and keep tens of millions of people in poverty.

Even more troubling, several economists said, there is no obvious engine to drive a recovery.

NYTimes

[wisconsin_cur]

In relation to the price of oil:

Global oil demand will collapse next year and commodities will not return to the highs they reached this summer in the foreseeable future, two authoritative reports said on Tuesday as they forecast a long and painful worldwide recession.

The stark conclusions came as the World Bank’s chief economist predicted that the world faced “the worst recession since the Great Depression”.

The US energy department said global oil demand will fall this year and next, marking the first two consecutive years’ decline in 30 years.

“The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices,” it said, forecasting that demand would drop 50,000 barrels a day this year and a hefty 450,000 b/d in 2009. US oil demand will drop next year to the lowest level in 11 years.

FT.com