World Bank Says Global Economy To Shrink 1-2 Percent

The global economy is on track for its worst recession since the 1930s with output likely to shrink by 1-2 percent this year, World Bank President Robert Zoellick told the Daily Mail newspaper. Central and eastern European countries were particularly vulnerable, he said, urging rich nations to do more to fill the financing gap left by an exodus of capital from the developing world.

The Daily Mail writes in an interview with Zoellick that when Zoellick looks across the horizon he sees mounting problems for both the industrialized and developing world. The global economic meltdown is costing lives. He says: "Our estimates are that because of the drop in growth, another 200,000 to 400,000 children will die each year. So that is certainly the wrong direction".

As matters stand, Zoellick is doing all in his power to try and fill the financing gap for the developing world left by the withdrawal of frightened bankers from the global capital markets. "We have about an extra $100 billion of lending to countries that are qualified to borrow, but these are not the very poorest countries". Zoellick also wants to gear up lending through the Bank's concessional arm, the International Development Association (IDA) "We have $42 billion for the 80 poorest countries... we are trying to front load that as much as possible"