World Banks says pace of growth resilient despite slight slowdown forecast in 2009. - In a new report, “Global Development Finance 2008, the World Bank indicates that despite the financial turbulence and soaring oil and energy prices, growth in developing countries is still robust. Private capital flows to emerging markets, which hit a record $1 trillion in 2007, are expected to drop to around $800 billion by 2009, which would still be the second highest level ever, says a new World Bank report. Global Development Finance 2008 predicts a slowdown in world GDP growth from 3.7 percent in 2007 to 2.7 percent in 2008, while growth in developing countries is expected to slow from an extraordinary 7.8% in 2007 to 6.5 % in 2008. Despite this downward adjustment, the projected developing-country growth rate of 6.4% in 2009-10 is above the average over the first half of this decade (5.6%) and well above the average of the 1980s and 1990s (3.4 %). The World Bank explains that this illustrates the sharp rise in the underlying growth potential of developing countries as both structural and macroeconomic polices have improved in recent years. The World Bank recognizes, however, that inflationary pressure worldwide, particularly high food and energy prices is “hurting poor people within developing countries”. Prices of food staples have risen more than 100% since 2005. The real price of rice hit a 19-year high in March 2008; almost simultaneously the price of wheat reached a 28-year high. Developing country growth in recent years has been powered in part by expanding capital flows, including by foreign banks that have expanded their presence in developing countries through acquisitions and the establishment of local affiliates. As of end-June 2007, foreign claims on developing-country residents held by major international banks stood at $3.1 trillion, up from $1.1 trillion at the end of 2002. the bulk of private capital flows to developing countries go to just a few big economies, among them the so-called BRICs - Brazil, Russia, India and China. The poorest nations, meanwhile, remain reliant upon official aid, which further declined in 2007. Net official development assistance by members of the OECD's Development Assistance Committee totalled $103.7 billion in 2007, down from a peak of $107.1 billion in 2005, the report says. Net FDI inflows to developing and high-income countries continued to surge in 2007, with global inflows reaching an estimated $1.7 trillion, just over a quarter of which went to developing countries. Net FDI inflows to developing countries as a whole increased to an estimated $471 billion. This was led by strong gains in Brazil ($16 billion) and Russia ($22 billion). China remained the top destination among developing countries for FDI in 2007, although its share continued to decline relative to other countries. Although the overall environment for foreign investment in China remains positive, recent developments have mad it more difficult for foreign firms to invest. In particular, the Chinese government is becoming more selective in approving investment projects with foreign involvement. The report is available at http: //web.worldbank.org/globaloutlook