The global economy will contract by about 3 percent this year, significantly worse than the previous estimate for a 1.75 percent decline, World Bank President Robert Zoellick said Thursday. In a statement ahead of the Group of Eight (G8) finance ministers meeting in Italy this weekend, the World Bank president said poor countries were most affected by the global economic crisis. “Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain, and the poor in many developing countries will continue to be buffeted by the aftershocks,” Zoellick wrote. The World Bank president said most developing economies will contract this year and face increasingly pessimistic prospects unless the decline in their exports, remittances, and foreign direct investment is reversed by the end of 2010. “There is much more we need to do in the coming months to mobilize resources to ensure that the poor do not pay for a crisis that is not of their making,” Zoellick said. The World Bank estimates the overall financing deficit for developing countries will be between $350 billion and $635 billion this year. “Low-income countries that have limited borrowing capacity due to low reserves and drained national budgets will face particularly difficulties in getting sufficient finance in the next few years,” Zoellick said. “Because of this, lending from the World Bank, the IMF (International Monetary Fund), and other sources will become increasingly important as the crisis rolls across low-income countries.”
