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However, developing countries will withstand the downturn to a large extent.

According to the Global Development Finance Report 2008, world GDP growth will tumble from 3.7 per cent in 2007 to 2.7 per cent this year, while economic growth in developing nations is expected to slow from 7.7 per cent to 6.5 per cent.

Growth in China is expected to slow to 9.4 per cent from 11.9 per cent, while in South Africa it will drop to 4.2 per cent from 5.1 per cent.

Meanwhile, Nigeria's economic growth rate is expected to rise to 7.9 per cent from 6.1 per cent as it benefits from increased oil prices.

Despite this, the bank warned the global community faced "unprecedented and complex challenges" in having to deal with a volatile international capital market and inflationary pressure created by soaring food and fuel prices in the slowdown.

For more information, see next week's Investment Adviser (16 June).