The World Bank estimates that the global economy will likely shrink for the first time since World War II – at least five percentage points below potential – and emerging markets will suffer the hardest hits with severe long-term implications.

We all know about the mess the United States, Britain, Spain and some other countries have gotten themselves into thanks to overenthusiastic housing bubbles.

The breakdown of international trade is key threat to the global economy in 2009, says Chris Mayer. Several countries have already taken action to protect domestic industries, including the US with its auto bailout. If this trend continues, Chris says the global downturn could become even deeper than imagined.