The world is in the middle of a global financial crisis, including a credit crunch that is hurting not only the general economy but also the housing markets. Already the United States and the United Kingdom have seen more foreclosures and fewer home sales than they ever have, and with the current state of affairs being what it is, many people are tightening their belts and attempting to make do the best way they can, even if that includes filing IVAs or claiming bankruptcy.

The state of the global economy is such that even the World Bank has taken notice, and they are predicting that the global economy is going to shrink during 2009. This is the gloomiest forecast ever to come from the organisation, and if this happens it will be the first time the economy has shrunk in such a way since World War II began. The forecast that was prepared by the World Bank was in preparation of a meeting at the end of March between the ministers of 20 industrialised nations and developing countries to discuss how to handle the current global conditions.

Based on information that has been collected and analysed by the World Bank, the economic shrinking the world will experience will happen quite possibly by the middle of 2009. They are expecting the industrial output to be as much as 15% lower than 2008's output, and global trade is expected to be at it's lowest since the 1930s and the Great Depression that swept the world.
The economic shrinkage will affect everyone and not just the lower classes of the world's industrialised nations. Developing nations are looking at a shortfall of up to $700 billion (£497 billion) through the year because private sector creditors will avoid any emerging markets to keep from worsening their own financial issues. How long this shortfall will continue remains to be seen, but the World Bank and international governments recognise that something must be done. Many of the world's developing nations rely on that money to keep functioning.

Nations such as the ones in Latin America, Central Europe, Africa, and Asia that are considered poor countries are unfortunate and innocent bystanders in this economic collapse. According to World Bank's managing director Ngozi Okonjo-Iweala, these nations have "no choice but to bear its harsh consequences." The last time the economy was this bad on a global scale was seventy years ago during the Great Depression and World War II.

Whether or not the twenty nations - known as the G20 - will come to an agreement on a course of action to rectify and reverse the global crisis remains to be seen. These nations are varied in the way they run not only their governments but also their banking systems although they are all intermingled and affect one another with severity, as can be seen by the current economic conditions the world is in. At this moment, only time will tell whether or not some of the actions that have already been implemented - such as the Obama stimulus package in the United States - will help set the economy back on the right track.