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As the Eurozone debt crisis continues to soar, the latest World Bank report alerts developing nations to be well-prepared beforehand for yet another unstable economic period. The report suggests developing nations to chalk-out effective plans by which the economic turmoil may be controlled. 

With a massive jitter that the Spanish and Italian economies would be staggered like that of Greek, the World Bank warning aims to prevent the crisis to spread along these bigger nations. Moreover, with a significant rise in the borrowing cost for these nations, there are concerns about their capability to repay their loans.

According to the World Bank forecast, the economies will experience a stunted growth by 5.3% this year, a drastic fall from 6.1% in 2011. In order to help developing countries boost up their economies, World Bank suggests them to strengthen the tax policies, invest in long-term infrastructure projects and develop a short-term approach. 

The World Bank, in its Global Economic Prospects, pointed out that 2012 had begun with favorable economic conditions - be it the promising market sentiment or lowering of interest - both heading to a stronger and better economic scenario. However a setback as the Euro debt crisis put a jeopardy to the progress. 

The severe financial crunch has hampered economic growth of the 17-country alliance in the Eurozone. The crisis has not only hit developed nations but has affected developing econmies as well. High income countries have seen a mere 1.5% growth this year.

On the current contractive financial situation, Hans Timmer, head of Development prospects at World Bank, said: "For all high-income countries, not just Europe, it will take many years to undo the damage that was done in the global financial crisis in 2008 or, more accurately, to address the problems that were created in the boom period before the crisis."

Mr. Timmer mentions that as developing countries have fewer means to absorb the economic shocks, they should focus on productivity-enhancing strategies and invest on long-term infrastructure projects for further development. He states that developing countries should shift their point of concentration from short-term changes in the foreign environment to 
infrastructural development. 

"It is still possible for developing countries to turn out very solid growth rates. In case of a serious financial crisis, no developing country will be spared," continues Timmer, if at all developed countries continue to grow at a feeble rate.

World's largest economy, the United States, should grow at a slightly slower rate of 2.1 percent. Meanwhile, Japan, which is recovering from the earthquake-tsunami disaster back in 2011, should gear its growth by 2.4 percent. 

There are reports that China is slowing down as well. The concern rests with economists that the world's second largest nation, China has lost a strong grip from the GDP. China, being the biggest manufacturers of commodities, had to face a 0.2% dip in its growth rate in 2012. 

According to key economic analysts, the cheap and plentiful of capital that was once the reason of high growth rates in the past decade, may no longer be available to the rescue. The only solution for time being is to lower down short-term borrowings and have trimmed-down budget deficits.

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