Wolfensohn predicts credit crunch losses will rise

The former World Bank President James Wolfensohn has said that outlook for financial markets and the losses from the global credit crisis has not been fully realized and likely to be in the region of $1 trillion.

He has also indicated there could be a restructuring of the global economy and the change and swing of power to the emerging markets who are in a position to establish and grow within the current financial constraints.

Banks thus far have reported around $309 billion of writedowns and credit losses.

The International Monetary Fund has predicted that the losses from the crisis which include any times to commercial real-estate is around $945 billion.

Currently global economic expansion is the slowest since 2003.

The European economy in particular is suffering most as growth predictions have lowered for 1.5 percent for 2009 as a result of the impact of the credit crunch, down for 2.1 percent.

The world economy is being balanced by the faster growing economies such as India and China will boost the global economy.

The IMF predicts world economic growth of 3.7 percent this year, down from 4.9 percent in 2007 though this will help to secure the future stability of economic growth.

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