Why the EU MUST soften to Britain over Brexit – shock economic forecast for no deal
The World Bank has issued a gloom-ridden forecast for how a no-deal Brexit could affect nations from Egypt to Morocco in the event of Britain leaving the EU without trade deals in place. The Washington-based organisation also listed Belarus, Ukraine and Moldova in the east and countries around the Mediterranean as those who could feel the sting of a bad Brexit deal. Franziska Ohnsorge, the report’s author, said: “Brexit without a deal is a risk to the UK and to Europe and any region that trades heavily with them. “It means that countries in eastern Europe like Moldova and as far away as Georgia and those in North Africa will be affected.”
The stark warning from Mr Ohnsorge comes after the World Bank urged economists to be aware of “darkening skies” brewing in the world economy.
The bank trimmed its annual global growth forecast by 0.1 percent for 2019, bringing it down to 2.9 percent.
For 2020, the World Bank is predicting 2.8 percent growth for the global economy.
Emerging markets also felt the pinch of the bank’s forecast, with the prediction for growth slashed to 4.2 percent, down from 4.7 percent.
As well as listing Brexit as one political uncertainty facing the economy, the World Bank also pointed the finger of blame to an ongoing trade war between the United States and China.
Market turmoil in the US has also had a negative impact on global stocks, the World Bank said.
CEO Kristalina Georgieva said: “At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead.”
She added: “We are facing a more difficult period for the global economy and the volatility in the financial markets certainly gave us that signal recently.”
Its sister organisation, the International Monetary Fund, has released several downcast forecasts this year, detailing concerns over how the economy is not prepared for the event of collapsing.
Back in October, the IMF warned of “large challenges” ahead “to prevent a second Great Depression” as the international organisation claimed the world markets are at risk of another meltdown.
The IMF also downgraded its growth forecast, projecting 3.7 per cent expansion globally for 2019, 0.2 per cent lower than it had forecast in April.
The warning came some 10 years after Lehman Brothers investment bank collapsed.
Then in December, David Lipton, the first deputy managing director of the IMF, warned of “storm clouds building” as he spoke of fears that “crisis prevention is incomplete”.
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