World Bank's Global Economic Prospects Report on Tuesday gave a jolt to the nations across the world. This biannual report examines the trends of growth of global economy and their impact on developing nations. In the report for 2012 released on Tuesday, the Bank has lowered the growth forecasts for developing countries to 5.4 percent from 6.2 percent for 2012 indicating a growth slowdown while for high income nations the forecast is around 1.4 percent. Global growth projections for 2012 were also substantially cut to 2.5 percent from the previous estimate of 3.6 percent and it is estimated as 3.1 percent for 2013. The Report came in at the time when economies were expecting that the economic turmoil is receding and there are prospects of revival.

The spiraling effect of the crisis in Europe is being felt by the economies all ver the world. While the economies were still getting over the impact of recession that was triggered in United States in 2008, the fresh bout of economic turmoil was a harder than expected blow. As the debt crisis situation in Europe worsens with no solution in sight, Standard and Poor's has again hit the headlines, this time for downgrading European Financial Stability Facility (EFSF). US rating agency, S&P, has downgraded the creditworthiness of EFSF by a notch to 'AA+'.

The eurozone crisis and the sluggish U.S economy have raised the chances of the economies facing another recession. Countries are gearing up to stay well equipped in the face of storm in these financial turbulent times. Considering the warnings of Europe tipping into recession and the events last week which turned the situation in Europe worse, the Reserve Bank of Australia eased its monetary policy by announcing a cut in the key rates by 25 basis points. At its November board meeting, RBA announced a cut in cash rate by 25 basis points to 4.5%.

World's third biggest economy, Japan posted a growth of 6% in the July-September quarter signaling towards a strong recovery. This is the first growth recorded after the turmoil caused by the tsunami, earthquake that pummeled Japan in March 2011 and the subsequent nuclear crisis. This is the fastest pace of growth of Japanese economy since January 2010 and is much in line with the expectations of the markets. Japan's comeback from the slump is already under clouds as it faces the global headwinds.