Gold News

Developing nations 'cushioning US economy'

Investors looking to buy gold might want to know that the World Bank has released a report suggesting that economic growth in developing countries is preventing the US slowdown from having severe global effects.

The Global Economic Prospects 2008 report forecasts economic growth of 7.1 per cent for the world's developing nations over the next 12 months, compared with 2.2 per cent for high-income countries.

It says that overall global growth fell to 3.6 per cent last year as a result of slowdowns in high-income nations, with this year set to see world growth of 3.3 per cent.

Recent concerns over the state of the US economy have helped to drive up gold prices to record highs.

"Overall, we expect developing country growth to moderate only somewhat over the next two years," commented Uri Dadush of the World Bank.

"However, a much sharper US slowdown is a real risk that could weaken medium-term prospects in developing countries."

Investment bank Goldman Sachs said today that the US will either soon be or is currently in recession, following comments from Merrill Lynch earlier this week stating that the country has already slipped into recession.


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