The global economy is on track for its worst recession since the 1930s with output likely to shrink by 1-2 percent this year, reports Reuters.
World Bank President Robert Zoellick told the Daily Mail newspaper that central and eastern European countries were particularly vulnerable.
“My guess is that growth will probably fall about 1 to 2 percent,” he told the paper in its Thursday edition.
“We haven’t seen numbers like that since World War Two, which really means the Thirties. So these are serious and dangerous times.”
Dominique Strauss-Kahn, head of the International Monetary Fund, warned the world yesterday that it would be gripped by a “Great Recession” and that his earlier forecast for economic stagnation this year was too optimistic.
Zoellick said G20 leaders, due to meet in London on April 2, should focus on sorting out problems in the banking system rather than additional fiscal measures to boost demand.
That view may put him at odds with the United States and Britain which have both urged G20 nations to increase spending to pull the economy out of recession.
“Stimulus plans will be like a sugar high unless you fix the banking system,” Zoellick told Reuters.
Zoellick says the World Bank was also seeking to raise money through its private-sector arm, the International Finance Corporation. “We could probably do $30 billion of IFC lending for the next three years,” he said.