Prospects for developing countries haveimproved considerably in the past six months finds the WorldBank's just-released "Global Development Finance2000." Industrial country output and world trade growthhave become stronger and more broadly based. Although pricesfor primary commodities have firmed, inflationary pressuresin the world economy remain contained. And while interestrates in some industrial countries have risen, spreads onlending to developing countries have fallen sharply--andcapital flows to developing countries have stabilized.Developing countries grew an estimated 3.3 percent in 1999,up 0.6 percentage points from the estimate in lastfall's "Global Economic Prospects" and morethan twice the pace in 1998 (table 1). Developing countrygrowth is expected to rise to 4.5-5.0 percent in 2000-02.During the recent financial crisis 45 developing countriescontaining 1.6 billion people experienced a drop in percapita income. But in 2000 those numbers are expected tofall to 14 countries with 140 million people. Still, thedeveloping world's adjustment to the recent crisis isfar from complete. Growth in 2000-02 will likely remainbelow trends before the crisis because frailties exposed andexacerbated by the crisis will take time to address.Moreover, the process of recovery varies greatly by country.
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