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Global stocks tumbled after the World Bank cut its growth forecast for developing economies in East Asia and the Pacific.
Global stock markets were mostly in the red on Monday after the World Bank slashed its growth forecast for developing countries in East Asia and the Pacific and warned the slowdown in China could accelerate.
The Washington-based lender cut this year’s growth forecast for the region to 7.2 percent, down from its May forecast of 7.6 percent and 2011 growth of 8.2 percent, the Agence France-Presse reported, citing the bank’s latest report.
Growth in China, the world’s second largest economy, is expected to slow to 7.7 percent this year from May’s forecast of 8.2 percent.
The Asian powerhouse expanded 9.3 percent in 2011.
"In a fragile external environment, the economy in the East Asia and Pacific region continues to slow down," the bank said, according to the Associated Press.
"The risk remains of a more pronounced slowdown in China than currently expected, while commodity exporters are at particular risk of a global slowdown."
World Bank Chief Economist for East Asia and the Pacific Bert Hofman said China was experiencing a “double whammy” from “weaker exports as well as domestic demand,” Reuters reported.
But the bank expects growth in China to be back above eight percent in 2013 as government stimulus measures kick in.
The data rattled investors, with markets in the United States, Europe and Asia mostly lower, the New York Times reported.