World Bank officials said economic growth in developing nations will slow drastically next year, as financial turmoil, slower exports, and weaker commodity prices take a toll.
Tuesday's report said growth in developing nations will fall nearly two percentage points to hit 4.5 percent in 2009. It said advanced economies will shrink by about one-tenth of a percent next year.
Bank officials say they are boosting lending and other aid to developing nations by $100 billion over the next three years. The aid package will include support for trade financing, help for banks, and a boost for infrastructure projects.
Washington is also working to bolster the flagging economy. Monday, President-elect Barack Obama and President Bush discussed possible aid to the troubled U.S. auto industry.
Analysts said General Motors, the largest U.S. car company might go bankrupt without government help, jeopardizing millions of jobs tied to the industry.
The U.S. Federal Reserve is trying to help the 4th largest U.S. credit card company by allowing it to become a commercial bank. Bank status will give the American Express company greater access to fund, and allow it to participate in the government's $700 billion financial rescue program. Amex has been hurt as customers fall behind on payments.
Tuesday stock prices fell sharply on major U.S., European, and Asian markets as investors worried about lower company profits.
One encouraging economic note came from a survey of retail gasoline prices. They have fallen from a record high of $1.8 a liter last July, to the current price of 58 cents a liter.
Some information for this report was provided by AP and Reuters.
