World Bank boss warns growth will fall up to 2%

LONDON: World Bank President Robert Zoellick warned in an interview on Thursday that growth in the world economy would likely fall by up to 2.0 per cent this year in the worst economic crisis since the 1930s.

Zoellick believes the outlook is worse than the International Monetary Fund (IMF) analysis of 0.5 per cent growth for 2009, the Daily Mail newspaper, which carried an interview with him, reported.

"My guess is that growth will probably fall about one per cent to two per cent," he told the paper. "We haven't seen numbers like that since World War Two, which really means since the Thirties.

"So these are serious and dangerous times." He warned that central and eastern Europe were "particularly exposed".

IMF chief Dominique Strauss-Kahn went further than the previous official analysis during a speech in Tanzania Tuesday when he said world growth could be negative for the first time in 60 years.

Ahead of next month's G20 summit in London, which aims to coordinate a global effort to tackle the credit crunch, Zoellick also said that the key to long-term stability was sorting out banks.

"Stimulus plans will be like a sugar high unless you fix the banking system," he said.

The US has urged coordinated steps by world powers to pump money into the economy but this has met with stiff opposition from eurozone countries.

British Prime Minister Gordon Brown, whose country holds the rotating G20 presidency, has repeatedly called for global banking reform including curbs on the short-term bonus culture.