The global economy is set to shrink by around 1 to 2 per cent in 2009 and no recovery is in sight until 2010, according to the World Bank’s President Robert Zoellick.
That estimate is in contrast with an earlier 1 percent decline projected by the International Monetary Fund, a Washington-based organization formed to stabilize international exchange rates, among other duties.
Zoellick, said at a conference held on Saturday in Brussels, that the global economic slowdown was unprecedented since the Great Depression in the 1930s.
Zoellick also criticised the stimulus plans being implemented in countries like the US, comparing them to a “sugar high” which would inevitably lead to another crash.
“2009 is going to be a very dangerous year,” Zoellick said. “It is indeed serious, and there are issues that go beyond the economic to political and social stability.”
Zoellick noted that the current crisis presents a challenge to the euro, a challenge to EU solidarity, and it highlights the division and issues between Western and Eastern Europe.
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